STP is all about in #SeanSpeak "picking your spot"
I mean it wouldn't make sense for me to try and sell an Audi R8 Spyder to a 78 Year Woman that uses a walking stick?... And neither would it make sense to do adverts that try and persuade them to go and buy the car would it?
In layman's terms: Vrooom Vrooom + Old Granny = BIG NO NO
Step 1 in the STP process is "SEGMENTATION"
Lars Perner from http://www.consumerpsychologist.com/cb_Segmentation.html says that "Segmentation involves finding out what kinds of consumers with different needs exist."
There's a million-and-1 different types of consumers with a million-and-1 different needs, but the main aim of segmentation is to find out the SPECIFIC NEEDS OF YOUR TARGET.
Lets take cars as an example. A high earning young male with a high disposable income won't just want a car that gets from A-to-B... He'll want a car that says LOOK AT ME! I'M THE DOGS BOLLOCKS AND MY £45,000 Car proves it.
His specific need is a FLASHY CAR THAT GETS THE JOB DONE IN STYLE.
Segmentation - Who Am I Trying To Appeal To?
Geographic, Demographic, Psychographic and Behaviouristic.
The useful thing about segments is that it puts consumers into groups that have similar characteristics.
Geographic Segmentation is based on the assumption that certain areas have similar attitudes to buying, it also looks at things like GDP and other aspects that will affect how much the people in an area are able to spend.
For example places like Amersham and Beaconsfield are home to some of the richest people in the UK (http://www.telegraph.co.uk/property/3361042/Britains-richest-towns-10-1.html) so we can expect adverts in those areas to be more about buying fancy jewels than tesco's value range
Demographic Segmentation looks at Age, gender and income....
Age - People of different ages buy different products. A 6 year old girl can't walk in to a BMW Showroom and buy a brand new 5-Series [It Just Won't Happen]
Gender: Men and Women shop in different ways and buy different things. (Blogging on this soon)
Jennifer Waters says that 'Men Hunt and Women Gather'
http://www.marketwatch.com/story/men-shop-as-hunters-women-shop-as-gatherers
Income: The more you make.. The more you can buy (simples ;])
Psychographic Segmentation
This separates people & households according to their Social class, lifestyle and personality
There are 6 classes: A, B, C1,C2, D and E
The problem with this form of Segmentation is that it only looks at the HEAD of the household and it Stereotypes peoples lifestyles which leaves big holes in the system.... Imagine someone in the A-Class Category who drives a 1996 Vauxhall Corsa that is not a Professional but is on a 6/7 Figure Salary. (Oh my God they've ruined the whole system!!!)
Behavioural Segmentation
I call this Surveillance segmentation... basically this looks at what people buy, when they buy it and brand loyalty.
http://www.learnmarketing.net/segmentation2.htm says that "Behavioural segmentation can be broken down into the benefit a consumer seeks from purchasing a product ... An example of this is Tesco's clubcard scheme"...If you've been shopping lately you'd know that Tesco have been allowing clubcard holders to Trade-in points for massive discounts.
This is a great marketing ploy because not only does allow Tesco to note what people buy, but added incentives mean that the consumer will spend that extra bit more just to get that reward or that extra £5 off their next purchase (We marketers are down right conmen aren't we)
Targeting - How Am I Trying Appeal To Them
Stage 2 of the STP Process is Targeting...
Once the segment or segments have been selected we then TARGET them using various ad campaigns. DAVID Cameron used targeting to con a lot of the public into voting for him. How? He got the young vote by making visits to Local schools and colleges... In London he went to the more populated parts so he could capture more votes... Simply put after choosing his segment, Cameron (and his campaign management team) then devised a scheme to target that segment.
What's most important about targeting is that you target the right segment! You wouldn't try to sell an energy drink to people in their 70's would you? NO, Didn't think so!
When choosing your victim (I mean segment) you have to consider how well that segment is being dealt with / robbed already... for example if I was to open a music store trying to compete with HMV aimed at people from 11-30 I'd know that it would be best not to open a physical store but instead open an online store. Why? Because 11-30 year olds are more likely to buy online or have the savvy to download music.
Secondly you have to know how saturated your targeted segment is and how demand will change over time and finally WHAT Strengths does your product/service have to offer to that particular segment.
The "Book" (Essentials of Marketing) says that there are 3 different approaches to targeting a segment or segments
1 - Concentrated
http://www.slidefinder.net/m/marketing_topic_segmentation_marketing_positioning/16346170/p2
This involves specialism; You only serve 1 particular segment.
The main advantages of this approach is that you find out the needs and wants of that particular segment and you get a reputation for being a specialist in that particular area.
The "con" to this approach is that you can appear to get complacent if you don't keep up!
Simply put... to use the concentrated approach means that you have to be consistent in "delivering the goods" and always know what the consumer wants in order to stay at the top!
2 - Differentiated
http://www.slidefinder.net/m/marketing_topic_segmentation_marketing_positioning/16346170/p2
Less of a risk than the Concentrated approach, the differentiated approach "sets its stall out" then unlike the concentrated approach it spreads to more than one specific segment.
These approaches are like Roulette... the differentiated approach increases your chances of winning by spread-betting, whereas the concentrated approach puts all your chips on 1 number.
The Problem with the differentiated approach is that you dilute your appeal but the main advantage is that you can always reposition to other markets and still make revenue.. consider it like this: in Roulette if you were to used the concentrated approach and bet on the number 27. there's a 1 in 37 chance that you'll be right... BUT! if you use the differentiated approach you spread your chips across the board i.e putting chips on 1,12,18,27,30,32 gives you a 6 in 37 chance to win but because you've spread so much your revenue decreases. Get It?
3 - Undifferentiated
The "Book" (Essentials of Marketing) says that there are 3 different approaches to targeting a segment or segments
1 - Concentrated
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| From |
This involves specialism; You only serve 1 particular segment.
The main advantages of this approach is that you find out the needs and wants of that particular segment and you get a reputation for being a specialist in that particular area.
The "con" to this approach is that you can appear to get complacent if you don't keep up!
Simply put... to use the concentrated approach means that you have to be consistent in "delivering the goods" and always know what the consumer wants in order to stay at the top!
2 - Differentiated
 |
| From |
Less of a risk than the Concentrated approach, the differentiated approach "sets its stall out" then unlike the concentrated approach it spreads to more than one specific segment.
These approaches are like Roulette... the differentiated approach increases your chances of winning by spread-betting, whereas the concentrated approach puts all your chips on 1 number.
The Problem with the differentiated approach is that you dilute your appeal but the main advantage is that you can always reposition to other markets and still make revenue.. consider it like this: in Roulette if you were to used the concentrated approach and bet on the number 27. there's a 1 in 37 chance that you'll be right... BUT! if you use the differentiated approach you spread your chips across the board i.e putting chips on 1,12,18,27,30,32 gives you a 6 in 37 chance to win but because you've spread so much your revenue decreases. Get It?
3 - Undifferentiated
The lazy man's approach: you set your stall out and try sell it to everyone (Hence the name Undifferentiated)
Its good because its low-risk BUT there's is no way 1 product will appeal to everybody. Even certain types of drinking water don't appeal to everybody!
My personal opinion is: if you want to make serious money DON'T USE THIS APPROACH... Its only useful for what I call "Quick-burst" ventures which only have small revenues... If you want to make some real revenue put your chips on the table!
Positioning
"Who Will I Sell My Wonderful Product To?"
(The implementation of your Targeting!)
Its good because its low-risk BUT there's is no way 1 product will appeal to everybody. Even certain types of drinking water don't appeal to everybody!
My personal opinion is: if you want to make serious money DON'T USE THIS APPROACH... Its only useful for what I call "Quick-burst" ventures which only have small revenues... If you want to make some real revenue put your chips on the table!
Positioning
"Who Will I Sell My Wonderful Product To?"
(The implementation of your Targeting!)
It sounds like such an easy question don't it? ... Well you're wrong!
How you position a product is crucial... it's sink or swim! The "book" says its all about PERCEPTION and how the customer perceives the product.
Lets do a Perception test on this Audi TT advert
How you position a product is crucial... it's sink or swim! The "book" says its all about PERCEPTION and how the customer perceives the product.
Lets do a Perception test on this Audi TT advert
First thing that strikes me about this advert is that its very masculine - Look at the angry wolves and bears and the cogs and helmets... Its all very very MACHO!
In my opinion they're trying to liken the Audi TT to a SNOWBEAST... When I first looked at this ad I instantly though of driving in the Swiss Alps, doing 120mph around those clear winding mountain roads on a winters day.
!! What does this have to do with Positioning you ask? Well...from my interpretation of the advert I can say that Audi have positioned this advert at people they KNOW will want to buy the car... People who can afford to! You'd have to be in either social class A or B to be able to afford the kind of holiday that involves Ski Resorts and Long Winding Roads. Personally I don't think Audi would target people that couldn't afford to buy this car otherwise they'd be out of business!
They've used a concentrated strategy - They've selected their segment (Profile: Young Male, Social Class A to B[High Earner]) and made an advert that specifically appeals to their target.
If that's not a great STP Example.. I Don't Know What Is ;)
Have a great day
Mr. LZF
Just like MaccieD's "I'm lovin it!" Simples!
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