History and Relevancy of marketing Concept of STP (Strategy, Targeting and Positioning)

Segmentation, targeting, and positioning together comprise a three stage process.  We first (1) determine which kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way.

•         Market segmentation: dividing market into distinct groups with distinct needs, characteristics, or behaviours, who might require separate products or marketing mixes

•         Target marketing: choosing which group(s) to appeal to

•         Market positioning: creating a clear, distinctive, and desirable position in the target consumer’s mind, relative to competition

STP—Segmentation, Targeting, Positioning: The Heart of Modern Strategy in Marketing

·                     How segmentation embodies the marketing concept

·                     Fundamental marketing principles and their relationships to segmentation: product positioning, distribution, communication, pricing, salesforce strategy

Customer Value Measurements

·                     How to conceptualize and quantify both functional value (product performance) and supplier/service value in the business marketplace

·                     Why and how to use customer value assessment as the basis for business market segmentation

Segmentation Research

·                     Alternative approaches: qualitative and quantitative

·                     Measurement techniques and their use

·                     Selection of organizations and respondents

·                     Using in-company data

·                     Interpreting and using results

STP Tools and Analysis for

·                     Segmenting markets based on customer needs

·                     Targeting the most attractive set of customers or markets

·                     Positioning offerings in crowded markets with perceptual maps

The Process Data Model

Positioning

Positioning involves implementing our targeting.  For example, Apple Computer has chosen to position itself as a maker of user-friendly computers.  Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.”  The Visual C software programming language, in contrast, is aimed a “techies.”

Gunter and Furnham (1992) prescribe that after selecting target markets the

strategist should develop positioning objectives to then develop them into a detailed

marketing mix. However, Aaker (1996) recommends developing the positioning

objective only after the brand identity and value proposition have been developed. In

exploring the latter, it is useful to understand Aaker's definition of positioning is "the part

of the brand identity and value proposition that is to be actively communicated to the

target audience and that demonstrates an advantage over competing brands." Kotler

(1994) refers to it as the unique selling proposition. Explained in other words, the

positioning statement is the point where the bundle of attributes join to form one concept

which aims at capturing the essence of that which the target audience seeks in the product

category. 

Positioning is the use of marketing to enable people to form a mental image

of your product in their minds (relative to other products).

Positioning involves implementing our targeting.  For example, Apple Computer has chosen to position itself as a maker of user-friendly computers.  Thus, Apple has done a lot through its advertising to promote itself, through its unintimidating icons, as a computer for “non-geeks.”  The Visual C software programming language, in contrast, is aimed a “techies.”

POSITIONING CONCEPTS:-

 Generally, there are three types of positioning concepts:

•Functional positions

Solve problems.
Provide benefits to customers.
Get favorable perception by investors (stock profile) and lenders.

•Symbolic positions

Self-image enhancement.
Ego identification.
Belongingness and social meaningfulness.
Affective fulfillment.

•Experiential positions

Provide sensory stimulation.

Provide cognitive stimulation.

•APPROACHES OF POSITIONING :-

The main positioning strategy is to either developing or reinforcing a particular
image for the brand in the mind of the customer. The main approaches to
positioning strategy are:-

•Customer benefits approach.

•The price-quality approach.

•The use or application approach.

•The product user approach.

•The product class approach.

•The cultural symbol approach.

•The competitor approach.

Target Market

After segmenting the market companies target the audience to be clearer in how to deal with the marketing problem and solution.

Targeting is the actual selection of the segment you want to serve the target market is the group of people or organizations whose needs a product is specifically designed to satisfy.

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small business’s success.

In target marketing, the first step is to do the research that will help you define and zero in on your target market. How to Find and Sell to Your Target Market will help you get started.

A principal concept in target marketing is that those who are targeted show a strong affinity or brand loyalty to that particular brand. Target Marketing allows the marketer / sales team to customize their message to the targeted group of consumers in a more focused manner.

Strategies for targeting the audience

Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing or mass marketing, differentiated marketing, concentrated marketing, and micromarketing/ niche marketing.

Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing (or attempting to sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the medium used to reach this broad audience.

For sales teams, one way to reach out to target markets is through direct marketing. This is done by buying consumer database based on the segmentation profiles you have defined. These database usually comes with consumer contacts (e.g. email, mobile no., home no., etc.). Caution is recommended when undertaking direct marketing efforts — check the targeted country's direct marketing laws.

Market segmentation

Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. These subgroups of consumers can be identified by a number of different demographics, depending on the purposes behind identifying the groups. Marketing campaigns are often designed and implemented based on this type of customer segmentation.

The key task is to find the variable, or variables that split the market into actionable segments

There are two types of segmentation variables:

(1) Needs

(2) Profilers

The basic criteria for segmenting a market are customer needs. To find the needs of customers in a market, it is necessary to undertake market research.

Profilers are the descriptive, measurable customer characteristics (such as location, age, nationality, gender, income) that can be used to inform a segmentation exercise.

The most common profilers used in customer segmentation include the following:

Profiler Examples

Geographic

• Region of the country
• Urban or rural

Demographic

• Age, sex, family size
• Income, occupation, education
• Religion, race, nationality

Psychographic

• Social class
• Lifestyle type
• Personality type

Behavioural

• Product usage - e.g. light, medium ,heavy users
• Brand loyalty: none, medium, high
• Type of user (e.g. with meals, special occasions)

Effective market segmentation

• Improves understanding of the customer base
• Provides a clear classification of the customers
• Enables the generation of a targeted product portfolio that responds to the needs of the market place
• Helps gauge a company's market position relative to the competition
• Leads to the effective fine tuning of marketing strategies

Marketing strategy

A marketing strategy defines objectives and describes the way you're going to satisfy customers in your chosen markets.
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives.
Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints . External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success . A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.

SWOT Analysis

SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company. A SWOT analysis should not only result in the identification of a corporation’s core competencies, but also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources.

External factors - Macro enviorment

--PESTEL 

• Political factors. These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
• Economic factors. These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour.
• Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing.
• Technological factors: new technologies create new products and new processes. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products.
• Environmental factors: environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance.
• Legal factors: these are related to the legal environment in which firms operate.

--Competitors annalysis

Inorder to do a competitor analysis a company can construct a porters five force model.

External factors - Micro enviorment

Out here 3 main key ellements are discussed:

• Consumers
• Suppliers
• Stakeholders

Internal Factors

Under this following key eelements are discussed:

• Men
• Money
• Machinery
• Minutes

However mentioned macro, micro elements can be clarrified by the following diagram

Marketing communication

Marketing communications is a subset of the overall subject area 'marketing'. 
Your marketing plan will be executed by using the tactical elements of the Marketing Communications, or Promotions Mix.

The above are the elements of marketing communication mix. The Marketing Communications Mix is the specific mix that a company uses to pursue its advertising and marketing objectives.

Advertising - Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.It reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term sales; Impersonal, one-way communication; Expensive.

Personal selling - Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. It is most effective tool for building buyers’ preferences, convictions, and actions; Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools. 

Sales promotion - Short-term incentives to encourage the purchase or sale of a product or service.  It may be targeted at the trade or ultimate consumer; Makes use of a variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand preferences. 

Public relations - Building good relationships with the company’s various publics by obtaining favorable publicity, building up a good "corporate image", and handling or heading off unfavorable rumors, stories, and events. It is highly credible; Very believable; Many forms: news stories, news features, events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion; Dramatizes company or product; Often the most under used element in the promotional mix; Relatively inexpensive (certainly not 'free' as many people think--there are costs involved). 

Direct marketing - Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. It has many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts

However, when deciding upon your unique marketing communications mix, you should also consider the Product Life Cycle. Here are some general guideline as to how and when to emphasize different parts of the mix according to the stages of a typical product life cycle:

Pre-Introduction: Light advertising, pre-introduction publicity.
Introduction: Heavy use of advertising, public relations for awareness, sales promotion for trial.
Growth: Advertising, public relations, branding and brand marketing, personal selling for distribution. 
Maturity: Advertising decreases, sales promotion, personal selling, reminder & persuasion.
Decline: Advertising and public relations decrease, limited sales promotion, personal selling for distribution

7P's of Marketing / Marketing mix

The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. Traditionally the marketing mix consisted of just 4 Ps but 'Booms and Bitner's ' espanded the marketing mix by adding 3 more P's in it, however the additional P's have been added because today marketing is far more customer oriented than ever before, and because the service sector of the economy has come to dominate economic activity in this country. 

It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry.

The 7Ps of the marketing mix can be discussed as:

Product - It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.

Price - Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.

Place - It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers.

Promotion - It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features.

People - People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.

Process - It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.

Physical (evidence) - It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

Introduction to marketing

Marketing is perceived as a mean of simply promotion and advertising. However, the term ‘marketing’ actually covers everything from company culture and positioning, through market research, new business/product development, advertising and promotion, PR (public/press relations), and arguably all of the sales functions as well.

There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs.

Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Kotler.

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.

The Chartered Institute of Marketing (CIM).

The CIM definition (in common with Barwell's definition of the marketing concept) looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention).

The right product, in the right place, at the right time, at the right price

Adcock.

The Marketing Concept 

The marketing concept rests on the importance of customers to a firm and states that:

• All company policies and activities should be aimed at satisfying customer needs, and
• Profitable sales volume is a better company goal than maximum sales volume.

To use the marketing concept, businesses should:

• Determine the needs of their customers (Market Research);
• Analyze their competitive advantages (Market Strategy);
• Select specific markets to serve (Target Marketing), and;
• Determine how to satisfy those needs (Market Mix).

Principle of marketing 

Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature market  and over-capacities in the last 2-3 centuries.The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.

The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfactions.It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.