Advertising and Integrated Brand Promotion 4e

Chapter 6 Market Segmentation, Positioning, and the Value Proposition

STP Marketing and the Evolution of Marketing Strategy 1. Target Market – A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign.

1. Positioning – Designing and representing a brand in a way that is distinct in the consumer’s mind.

1. Positioning Strategy – Selecting key themes to communicate to a target market.

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Beyond STP–Regular Assessment • Reassess segmentation strategy: – A detailed examination of the current target segment to develop new and better ways of meeting its needs, or a need to change the target and reposition the brand to a new segment.

• Pursue product differentiation strategy: – Product differentiation is a firm’s effort to emphasize or even create differences in brands to distinguish them from competitors. Advertising plays a critical role as part of the product differentiation strategy because the consumer will have to be convinced that the difference is meaningful. Copyright © 2006 Thomson Business and Economics. All rights reserved.

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The STP Marketing Process (Segmenting, Targeting, Positioning) 1. Break the market into smaller, more homogenous segments 2. Specifically target discrete market segments 3. Position the brand to appeal to the targeted segments

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Identifying Target Segments: Market Segmentation Geography Demographics

Psychographics

Lifestyles Benefits

Commitment Levels Usage Patterns

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Segmenting by Usage and Commitment • Advertising and promotion targeted to: – Heavy users – Nonusers – Brand-loyal users – Switchers/Variety seekers – Emergent Consumers

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Demographic Segmentation • • • • • • •

Age Gender Race Marital Status Income Education Occupation

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Which demographic segment is targeted by this advertising campaign?

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What is the target demographic for this advertising campaign?

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Geographic Segmentation

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Psychographics and Lifestyle Segmentation

Opinions

Lifestyle

Activities

Lifestyle segmentation provides insight into consumers’ motivations

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Benefit Segmentation

Prestige?

Passenger Safety?

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Business to Business Markets • Markets segmented by: – Usage rates – Geographic location – SIC (Standard Industrial Classification) Code – Stage in the purchase process: first time vs. experienced buyers – Benefits desired

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Prioritizing Target Segments • Examine your ability to deliver value to the segments and costs of new capabilities— distinct competencies of the firm – Research segment size, growth potential and usage frequency – Assay the competitive environment – Find a niche you can scratch

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Effective Positioning…. • …is based on the substance of the brand’s values. • …is consistent over time. • …is both simple AND distinctive.

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Fundamental Positioning Themes • Benefit Positioning • User Positioning • Competitive Positioning

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Do you think this ad for Panasonic is emphasizing benefit, user or competitive positioning?

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Repositioning • Used to revive an ailing brand or fix a lackluster new market entry • The challenge: changing perceptions of a brand forged over years of advertising.

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Capturing the Value Proposition

Functional Emotional Self-expressive Benefits

V A L U E

Relative Price

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