This document discusses the STP process of marketing management. It begins by defining segmentation, targeting, and positioning. Segmentation involves classifying customers into groups based on common characteristics. Targeting evaluates segment attractiveness and selects segments to enter. Positioning arranges a product to occupy a clear place in the consumer's mind relative to competitors. The document then discusses target markets and the advantages of segmentation. It outlines requirements for effective segmentation such as segments being measurable, accessible, substantial, and differential. Steps in STP are identified including identifying segmentation bases, developing segment profiles, selection criteria, and selecting target segments. The document provides examples of segmentation bases and strategies for business markets.

1. STP
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Course: MBA-I
Subject: MARKETING MANAGEMENT - 1
Unit: III

2. The STP Process
 Segmentation is the process of classifying customers into
groups which share some common characteristic
 Targeting involves the process of evaluating each segments
attractiveness and selecting one or more segments to enter
 Positioning is arranging for a product to occupy a clear,
distinctive and desirable place relative to competing products in
the mind of the consumer

3. Target Market
 A market is a set of all actual and potential buyers
 A target market is a group of people toward whom a
firm markets its goods, services, or ideas with a
strategy designed to satisfy their specific needs and
preferences.
 Any marketing strategy must include a detailed
(specific) description of this.

4. Advantages of Segmentation
1. The process of breaking up a homogeneous market
into heterogeneous segments forces the marketer to
analyse and consider both the needs of the market
and the company’s ability to competently serve those
needs – thereby making the company better
informed about its customers
2. Competitor offerings and marketing positioning must
also be analysed in this context so the company
must consider what its competitive advantages and
disadvantages are, helping it to clarify its own
positioning strategy
3. Limited resources are used to best advantage,
targeted at those segments that offer the best
potential

5. Requirements for Effective SegmentationRequirements for Effective Segmentation
• Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
DifferentialDifferential
ActionableActionable
• Segments must respond
differently to different marketing
mix elements & programs.
• Effective programs can be
designed to attract and serve
the segments.

6. Steps in Segmentation,
Targeting, and Positioning
1. Identify Bases
for Segmenting the Market
2. Develop Profiles
of Resulting Segments
3. Develop Selection Criteria
4. Select Target
Segment(s)
5. Develop Positioning
for Each Target Segment
6. Develop Marketing
Mix for Each Target Segment Market
Positioning
Market
Targeting
Market Segmentation

7. Step 1. Market Segmentation
Levels of Market Segmentation
Mass Marketing
Same product to all consumers
(no segmentation)
Mass Marketing
Same product to all consumers
(no segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Segment Marketing
Different products to one or more segments
(some segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Micromarketing
Products to suit the tastes of individuals and locations
(complete segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Niche Marketing
Different products to subgroups within segments
(more segmentation)
Local Marketing
Tailoring brands/ promotions
to local customer groups
Individual Marketing
Tailoring products/ programs
to individual customers

8. Segmentation
Bases for Segmenting Consumer Markets
Geographic
Demographic
Age, gender, family size
and life cycle, or
income
Psychographi
cSocial class, lifestyle,
or personality
Behavioural
Occasions, benefits
sought, user status,
usage rate, loyalty
Nations, states,
regions or cities

9. Step 1. Market Segmentation
Bases for Segmenting Business Markets
Bases
for Segmenting
Business
Markets
Bases
for Segmenting
Business
Markets
DemographicsPersonal
Characteristics
Situational
Factors
Operating
Characteristics
Purchasing
Approaches

10. Segmenting Business
Markets
 Segmentation by customer size or geographic location
 Four segments of business customers
 Programmed buyers
 Relationship buyers
 Transaction buyers
 Bargain hunters

11. Step 1. Market Segmentation
Bases for Segmenting International Markets
Political/
Legal
Political/
Legal
CulturalCultural IntermarketIntermarket
EconomicEconomicGeographicGeographic
Industrial MarketsIndustrial Markets

12. Step 2. Market Targeting
Evaluating Market Segments (developing
selection criteria)
 Segment Size and GrowthSegment Size and Growth
 Analyze sales, growth rates and expected profitability for
various segments.
 Segment Structural AttractivenessSegment Structural Attractiveness
 Consider effects of: Competitors, Availability of Substitute
Products and, the Power of Buyers & Suppliers.
 Company Objectives and ResourcesCompany Objectives and Resources
 Company skills & resources relative to the segment(s).
 Look for Competitive Advantages.

13. Step 2. Market Targeting
Market Coverage Strategies
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Segment 1Segment 1
Segment 2Segment 2
Segment 3Segment 3
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing
Mix
Company
Marketing Mix 1
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 2
Company
Marketing Mix 3
Company
Marketing Mix 3
MarketMarket
A. Undifferentiated Marketing
B. Differentiated Marketing
C. Concentrated Marketing

14. Step 2. Market Targeting
Choosing a Market-Coverage Strategy
Company
Resources
Product
Variability
Product’s Life-Cycle
Stage
Market
Variability
Competitors’
Marketing Strategies

15. Step 3. Positioning for Competitive
Advantage
 Product’s PositionProduct’s Position - the way the product is
defined by consumers on important attributes
- the place the product occupies in
consumers’ minds relative to competing
products.
 Marketers must:
 Plan positions to give their products the
greatest advantage in selected target
markets,
 Design marketing mixes to create these
planned positions.

16. Step 3. Positioning for Competitive
Advantage: Strategies
Against a
Competitor
Against a
Competitor
Usage
Occasions
Usage
Occasions
Away from
Competitors
Away from
Competitors
Product
Attributes
Product
Attributes
Product
Class
Product
Class
Benefits
Offered
Benefits
Offered
User ClassUser Class
B
B
A
A
E
E
D
D
C
CH
H
G
G
F
F

17. Steps to Choosing and Implementing
a Positioning Strategy
 Step 1. Identifying Possible Competitive
Advantages: Competitive Differentiation.
 Step 2. Selecting the Right Competitive
Advantage: Unique Selling Proposition (USP).
 Step 3. Communicating and Delivering the Chosen
Position.
 Step 4. Support the positioning strategy with a
unique marketing mix

18. Developing Competitive
Differentiation
ProductProduct ServiceService
ImageImage PeoplePeople
Areas for Competitive
Differentiation
Areas for Competitive
Differentiation

19. Selecting the Right Competitive
Advantages
Criteria
for
Determining
Which
Differences
to
Promote
Criteria
for
Determining
Which
Differences
to
Promote
AffordableAffordable SuperiorSuperior
ProfitableProfitable
PreemptivePreemptive
DistinctiveDistinctive
ImportantImportant
CommunicableCommunicable

20. Step 4 – Supporting the
positioning strategy
 At this stage the company has decided on its positioning
strategy and must now design a marketing mix to support this
strategy. The next part of the course looks at ‘Developing the
Marketing Mix’

21. PITFALLS IN POSITIONING
 Positioning is undeniably a tough job
and if a marketer attempts to position a
pdt without careful planning, it becomes
very difficult to sustain the pdt in the mkt
and derive a competitive advantage.

22. PITFALLS IN POSITIONING
 Quite often, it happens that a product is
positioned on the basis of obvious
aspects of the product feature; this
becomes too predictable and the charm
in positioning is lost.

23. PITFALLS IN POSITIONING
 Most companies try to live in the future
rather than position their pits based on
their current capabilities. They might
achieve newer tech and resources in the
future.

24. PITFALLS IN POSITIONING
 Under Positioning
 Over Positioning: Tanishq Jewelry
 Companies implements Inside – out
strategy instead of Outside – in strategy
 Short Term vs Long Term goals and
profits

25. PITFALLS IN POSITIONING
 Confusing Positioning: Crystal Pepsi
 Doubtful Positioning: companies try to
create brand awareness among
customers even before positioning the
brand clearly in the market.
 Customer Expectations

26. REFERENCES
 www.slideshare.net/.../chapter7-market-
segmentation-targeting-positioni...
 PHILIP KOTLER (BOOK –
MARKETING MANAGEMENT-
CHAPTER-7)
 www.apu.ac.jp/~att05834/mot/module0
6/module06.ppt
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