Segmentation Targeting and Position as the Most Appropriate Marketing Strategy for Organizations
Andaleeb & Hasan, (2017, p. 264) imply that the STP is a tool for value creation and presenting a sequence of delivery for company products and services. In the first phase of the process the STP segments the market, selection of market segment follows and lastly the development of the offer value positioning. The STP models are vital for creating marketing communication plans because it assists the marketer in prioritizing, developing and delivering a relevant message to the right customer. This paper discusses segmentation, targeting, and position as the most appropriate marketing strategy for organizations. Particular areas in the industry to compete b. What segment of that niche would the focus strategy be sustainable in overcoming the barriers of the segments Havaldar (2005, p. 105) implies that segmentation breaks down market structure enabling the firm to develop the appropriate market mix that suits the requirements and concern of a particular segment by providing high-value product and services to customers.
Figuratively, the company creates monopolistic and oligopolistic market conditions by utilizing various demand curves for a specified category product. By doing so, segmentation applies the microeconomic theory of price discrimination. For instance, Adhikari & Roy (2017, p 38) note that Adams Childrenswear emerged from a loss-making company to a favorite in an industry dominated by heavyweights like Woolworth, Conran, and Boots. Adams examined the markets and competitors to determine the position and role in the market. Thus, Adam focused on enhancing their designs, quality, and value. They targeted young mothers who have less time and mobility; their product revolutionized home careering. Also, they focused emphasis on customer service, design and firms image created a distinct position in catering as a specific segment. Henry Ford had an advantage in mass production and marketing strategies.
Ford pioneered the modern vehicles earlier and had perfected the production of identical model automobiles with an effective high pumped price. On the other hand, Alfred Sloan of GM a competitor analyzed the market and segmented by the prices people wanted to pay and the differences in the vehicles they wanted. He succeeded by offering the target niche their choice and color of cars at favorable prices, unlike Ford’s rigid systems. Currently, GM is a top automaker up to date with a numerous number of car models. As an example, Baines et al. (2013, p 17) report that Lego, the Early Learning Centre and Toys ‘R’ Us dominate the toy industry because they recognize the difference in characteristics in relation to their age.
The companies have henceforth developed and explored new toy designs suited for specific age categories. Another example where segmentation recognizes demographics is evident in pet food manufacturing who have different dog food for puppies, adult dogs, overweight dogs and sensitive stomach illness. Opportunities for maximizing the child choosing maximized on the Geodemographic clustering facilitates identifying and uncovering consumer prospects based on media habits, purchasing patterns and individual promotional response about the classification. Benefits Sought Segmentation also categorizes a market according to the benefits and wants a firm strives to satisfy as well as the nature and demand for different commodities. The desirable benefits sought by consumers, therefore, encompass value preference like quality, image, style among others. For instance, whenever one wants to buy toothpaste he seeks different benefits from it.
Some choose fluoride protection, some fresh breath, and some taste just as Maclean Sensitive and Sensodyne focus on providing protection for sensitive teeth as compared to Colgate for Kids that focus on luring kids with mint-scented taste (Lamb et al. , 2014, p 399) 3. the U. S Times Company utilized that information and developed Timex brand that focuses on the first two groups (Dooley & Lowe 2008, p. Segmentation techniques and evaluation After the firm selects the segmentation variables, the data helps in choosing the most appropriate statistical process to identify the segment. Segmentation techniques hence focus on data and their dependence and interdependence. The most common types of segmentation techniques include cluster analysis, multi-regression, discriminant analysis, chi-square automatic detection and factor analysis. Examples of generic competitive strategies include differentiation that successfully fosters the generation of customer values, consistency and business perseverance.
Schlegelmilch, (2016, p. 42) notes that for a long time, Coca-cola produced only one type of drink with the intention of creating a mass market appeal. Even though the strategy still plays a huge part in their market folklore, the company changed it partly so as to cope up with aggressively competitors like Red Bull and the emergence of soft beverages and energy drinks like Lucozade and Ribena. Differentiation and de-massification enabled the company to explore an untapped demand for soft drinks of various tastes under different packages and containers. The company cut out on packaging hype, recycling of packaging papers and customer education among other objectives to promote health over glamour. C. Positioning After selecting the target market, a strategist develops position objectives for the purpose of composing the right market mix.
Positioning decides the how, where, and when to focus a product brand or group of brands, which represent the need and wants of customers in that segment translating into a palpable mix of product, price, distribution, and promotion. The customer can view the product and its position in relation to other competing commodities. Value proposition representing the benefits that influence brand and target audience relationship. Notably, the target audience paying for the product perceive the commodity different from how the manufacturer sees the product. Hence, positioning is the place of the product in a given market and the perception of the relevant group of target customers. Ries & Trout (2001, p. 3) classifies positioning as the sum of product and attributes ascribed by the customer attributable to its standing, quality, type of users, memorable strengths weakness and characteristic.
STP emphasizes on the enhancement of products, pricing, location, and promotion. Further, the approach advocates for competitive marketing methods over mass marketing concept. This section highlights guidelines to consider at the three phases of the STP process. Baines et al. (2013, p. The three processes, segmentation, targeting and positioning aim at deriving most suitable ways for their companies to maximize competitive advantage and improve their service and products in their target markets (Lamb et al. 2014, p. Segmentation entails grouping consumers as per specific criteria according to the determinant of market structures. It consists of identifying the segment, segment measures, and variables. Targeting refers to identifying what segment to focus on while position denotes selecting the most appropriate market mix for the target consumers with relation to product quality, pricing, accessibility, and promotional criteria.
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Hence these companies and organizations have a competitive edge against the rest of companies and organizations that do not take marketing as a serious issue. Hence because of this companies and organization have a separate department within their company's an organization's hierarchy that is solely dedicated to marketing. In this way, there are able to take marketing more seriously and the outcome of this has been commendable. Marketing tools range from televisions, radios, newspaper and even social media. INTRODUCTION According to the business, dictionary marketing can easily be defined as the study and administration of exchange relationships. This is because there are free to open up an account and secondly because they are widely used most people irrespective of their background and even financial status.
STP, which in full can be defined as segmentation, targeting and positioning. This type of marketing is an effective marketing approach in the modern world. Its popularity with the other types of marketing strategies in terms of usage can only be defeated by the SWOT/TOW matrix. This type of marketing approach can be most useful to marketers when they are planning marketing prepositions for a product since it helps them develop and deliver a more personalized and relevant message to give to there audiences and future customers. This would considerably help the companies and organizations avoid unnecessary risks, reduce costs and even improve their profit margins. Therefore, marketing segmentation can be seen as a very important aspect for any company and organization to prosper.
There are different types of market segmentations namely; behavioral segmentation, psychographic segmentation, demographic segmentation, geographic segmentation. Psychographic segmentation is a one which uses a consumer’s lifestyle, interests and even opinion in the definition of a market segment (Dickson & Ginter (2008). Also, this segmentation can be done on the basic personality and social class of certain consumers in the market. This can be clearly seen in the automobile industry, whereby the products are segmented according to the different income rates of its consumers. For example, a vehicle like Maruti is a vehicle for the low-income earners hence in its marketing it will target that group whereas vehicles like BMW and Audi are for the high-income earners hence in its marketing it will target that group.
The last type is the behavioral segmentation, this type segments the market on the basis of usage and decision-making pattern of consumers within a market. This segment can clearly be seen in the smartphone industry where a smartphone like a blackberry was made for business people whereas a smartphone like Samsung was made for people who loved Android. The criteria for segmentation includes the need for the consumer. The fourth step is whether the chosen segment is giving profit, in this step the company owner of the restaurant analyzes whether he or she is getting the right profit from the chosen segment and if not, what can be done to change that. The fifth step is the positioning for the decided segment, here the owner positions the product in the consumer's mindset and provides the value for his or her products.
The sixth step is the expansion of the segment, here the segment chosen should be able to expand with the business or else the business will run out of ideas. For example, if the restaurant is very profitable and wants to expand to other areas the owner can implement the same segmentation in other areas like his or hers. The last step is the incorporation of a segment into your marketing strategy. This, therefore, clears any standing blocks faced by the company and organization during marketing. Targeting has some prerequisites for it to succeed in a selected market. The first precondition for its success is that targets should be valuable. From within a market, one should be able to decide the most valuable targets within the market.
For example, in the soap company, it would be best if it was established within a showroom preferably in an area with lots of residential colonies. Hence the positioning of a product is an art that is built over time by vigorous advertising, longevity within the individual industry and also the provision of quality products. The positioning of a company can be destroyed and once that happens it may take the said company a long time and numerous resources, hence companies will go to greater highs to ensure that never happens like the inclusion of specific trademarks within their products hence fighting counter fake products that seek to tarnish their image. APPLICATION OF THE STP MARKETING PROCESS IN AIRLINE AND E-COMMERCE INDUSTRIES.
The STP marketing strategy has been so popular and effective in that it is even incorporated in marketing strategies of airlines like Qatar airway. Qatar Airways is a perfect industry that has included this marketing technique and the results have been very good. Who is more inclined to choose a brand over loyalty than price. Hence Qatar has different business classes for example business class to cater for this kind of market. The final market is loyal to loyalty type of travelers, this is people who fly more often for either business matters or even personal reasons. Hence Qatar has catered for that through the provision of offers, for example, a flyer with a certain amount of loyalty points can redeem them for a free flight in future.
This is some of the ways airlines such as Qatar Airways uses the STP process in its marketing strategy, and by the numbers it can be deduced that they are better than alright and for this reason alone other airlines that did not use the same marketing strategy are now shifting to the STP simply because of its success. This success can be rooted in marketing strategy applied by the said company. Companies like MacDonald's and KFC are so of the other companies that have used this type of marketing strategy and are now very successful because of it. Hence it would be advisable for companies that want to be successful to apply this type of marketing strategy if they want to be successful.
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