The Sequence LOGIC of Segmentation, Targeting & Positioning (STP)

Strategic Technique Task FunctionA. Why Marketers Choose Customers

1) Market Segmentation Segmentation Bases/Variables

DemographicGeographicPsychographic (Lifestyles)Behavior (Usage/Benefits)

“Profiling”; Carving the total brand market into segment profiles using “Segmentation Bases” (also called “variables”).

2) Market Targeting … for Target Marketing Single Segment Strategy (“Concentrated”) Multi Segment Strategy (“Differentiated”) Total Market Strategy (“Undifferentiated”)

“Picking”; Choosing the segment(s) to “target,” depending on the likely “fit” between “customer value” & “brand value”* Justify with Segmentation Criteria -- substantial, identifiable/measurable, accessible, responsive

B. Why Customers Choose Brands

3) Positioning Analyze brand with “Perceptual Maps” Differentiate with “Positioning Bases”

included in “Marketing Mix” (4Ps)1st Find top 2 brand attributes for customer2nd Form 2 attributes into axes & label low/high3rd Identify “ideal point” for customer4th Plot all brands for the customer mind axes5th Plan moves closer to “ideal point” that leave competitors farther from “ideal point” than your brand using a combination of:

a) Repositioning with existing axes categoriesb) Repositioning with new axes categories

“Plotting”; Graph customer “ideal” & brands in Perceptual Map

Variable “x” Variable “y”

Variable “a”

Variable “b”

“a/x”

“b/y”“b/x”“a/y”

Attribute 1

Attribute 2

high

low

low high

“ideal”*

Brand A*

Brand C*

Brand B*