2. Chapter 4: UNDERSTANDINGthe MARKET ENVIRONMENT: SEGMENTING, TARGETING andPOSITIONING 4.1

3. STP Marketing & Evolution of Marketing Strategy Segmentation Segmentation Target Segment Target Segment Brand Positioning Brand Positioning STP Marketing 4.2

4. The Value of STP Marketing Precise Specification of Marketing Objectives Precise Specification of Marketing Objectives Better Understanding of Needs and Motives of Target Market Better Understanding of Needs and Motives of Target Market Better Understanding of Customers and Noncustomers Better Understanding of Customers and Noncustomers More Efficient Allocation of Resources More Efficient Allocation of Resources Ability to Assess Strengths and Weaknesses Ability to Assess Strengths and Weaknesses Ability to Identify Messages to be Used Across All Promotional Tools Ability to Identify Messages to be Used Across All Promotional Tools Better IMC Management of Promotional Effort Better IMC Management of Promotional Effort Ability to Respond More Quickly to Changes in the Environment Ability to Respond More Quickly to Changes in the Environment4.3

5. Beyond STP Marketing STP Decisions are Continuously Evolving Due to the Dynamic Nature of Markets STP Decisions are Continuously Evolving Due to the Dynamic Nature of Markets To Maintain the Profitability of Brands, Segmentation Decisions Must be Reassessed Regularly To Maintain the Profitability of Brands, Segmentation Decisions Must be Reassessed Regularly Product Differentiation Infuses STP Decisions with Vitality Product Differentiation Infuses STP Decisions with Vitality4.4

6. Demographic Segmentation Segmentation Based on Physical Descriptors of Individuals Segmentation Based on Physical Descriptors of Individuals Age Age Gender Gender Ethnic Background Ethnic Background Education Education Marital Status Marital Status Occupation Occupation4.5

7. Brands in Common Product Categories Can Be Targeted to Audiences Based on Ethnic Background 4.6

8. What is the Basis for Segmentation in this Message? 4.7

9. Identifying Target Segments Geographic Segmentation Geographic Segmentation Climate & Topographical Features Climate & Topographical Features Food Preferences & Preparation Habits Food Preferences & Preparation Habits Entertainment Preferences Entertainment Preferences Recreational Activities Recreational Activities Geodemographic Segmentation Geodemographic Segmentation PRIZM PRIZM4.8

10. Identifying Target Segments (con’t) Usage Patterns & Commitment Levels Usage Patterns & Commitment Levels Heavy Users Heavy Users Nonusers Nonusers Brand Loyal Users Brand Loyal Users Switchers or Variety Seekers Switchers or Variety Seekers Emergent Customers Emergent Customers Psychographic & Lifestyle Segmentation Psychographic & Lifestyle Segmentation AIO’s AIO’s Benefit Segmentation Benefit Segmentation4.9

11. A Classic Example of Benefit Segmentation 4.10

12. Segmenting Business-to-Business Markets TYPES OF ORGANIZATION SEGMENTATION STANDARD INDUSTRIAL CLASSIFICATION (SIC) SEGMENTATION SIZE OF ORGANIZATION SEGMENTATION GEOGRAPHIC LOCATION SEGMENTATION END USE OF SEGMENTATION HORIZONTAL & VERTICAL MARKET SEGMENTATION 4.11

13. Prioritizing Target Segments CAPABILITIES OF THE ORGANIZATION SIZE AND GROWTH POTENTIAL OF THE SEGMENT COMPETITIVE FIELD 4.12

14. Formulating a Positioning Strategy for a Brand ESSENTIALS OF EFFECTIVE BRAND POSITIONING STRATEGIES Substantive Value Substantive Value Consistency Consistency Simplicity & Distinctiveness Simplicity & Distinctiveness FUNDAMENTAL BRAND POSITIONING THEMES Benefit Positioning Benefit Positioning User Positioning User Positioning Competitive Positioning Competitive Positioning REPOSITIONING BRANDS 4.13

15. Would You Say That Being “Cool” Offers Substantive Value as a Basis Positioning Strategy? 4.14