STP Marketing

Marketing is everywhere and everybody is being targeted for one product/service or another. One important thing to consider is how marketers select their target market. How do they identify a market and how do they find the right customers? This can be achieved using segmentation, targeting and postioning.

Segmentation
Targeting
Positioning

=STP

Segmentation is when marketers identify a need that a group of people have. A market can be subdivided into smaller branches; for example John Freida is a leading hair care brand and creates products for all hair types. They have noticed a customer demand for products for coloured hair and have created distinct, individual ranges for blondes, brunettes and redheads. Jacamo, a clothing website for larger sized men, has recognised the growing trend in the male population's interest in fashion but realised that most fashionable clothing was aimed at young, thin men. Jacamo segmented a larger market (men's fashion) and targeted men who need larger clothing sizes but still want to look good.

An example of John Freida's Brilliant Brunette range

Click to see a Jacamo Advert - notice the profiling!!

Segmenting is often done by 'profiling'. A brand can create the ideal customer and base their advertising campaigns around what this fictional character wants and does. Say Dior has produced a new perfume for ladies, targeting sophiscated, fashion conscious businesswomen. Their profile could be called Alexa, she's the Vice President of a large production company. Her Dior suits are always perfectly tailored and she frequents only the most exclusive bars and clubs in London. She has a close circle of female friends who are equally as self confident and successful. The perfume advertisements will be placed in high end fashion magazines, like Tatler and Vogue. Television commercials will air during programmes Alexa would like, perhaps Lipstick Jungle and The Apprentice. She will be offered a test of the perfume as she walks into Harrods or Selfridges on the weekend. These are magazines, shows and stores that Alexa likes, therefore the target market will like them too.

"Alexa"

So what is the point in segmenting? A company can better match the needs of their customer to the product, this will create brand loyalty and the customer will continue to use this product as the company has focussed on what their market needs, ideally more so than competition. This means that marketing messages can be more specific, because the target market is so distinct. In return, this can enhance profits, particularly with premium brands, because a loyal customer will be happier to pay for the product they feel is almost tailored to their needs. From a marketer's point of view, they can increase their market share if they have created a more likeable product or brand image than their competitors. Segmentation doesn't necessarily increase market size, but market share can strengthen by targeting a subcategory of a larger market.

For example:

By segmenting a market, you are targeting the 'high end' of this image. In relation to food retailers, Tesco would the be 'mass' section, Waitrose could be considered 'mainstream' and a family butcher would be 'high end'. The butcher has a small, distinct market- those who will pay for fresh, quality beef as opposed to those who will buy frozen, low-grade meat from Asda.

Certain criteria should be followed for segmentation to be successful. It should be...

• Effective - Is there a genuine need for this product or service?
• Identifiable - How will you find the customers?
• Profitable - Is the segment large enough to create a decent profit?
• Accessible - Is this segment easily reached?
• Actionable - Is the segmentation possible?

Segmenting may be broken down into four main markets...

• Geographic - This option divides a market by country, region, county, town, postcodes et cetera.
• Demographic - This uses age, gender, race, occupation, religion et cetera to divide a market.
• Psychographic - This relates to division by social class, life style and personality.
• Behavioural - This divides people by their knowledge, values and attitudes towards a product or service.

... which can be mutually exclusive.

This website defines market segmentation well - Net MBA

Further information on the reasons why segmenting is done - Tutor 2 U

Secondly, targeting is the point at which each segment is analysed to conclude whether or not it is a worthwile, profitable market. The one with the greatest prospects will be chosen as the one to promote. 

i.e. A company wants to launch a new style of shoes, which will be most profitable? Luxury, high fashion inspired shoes? Casual, daywear shoes? Integrated fitness/posture shoes?  Kids' shoes? All will be analysed and researched and the style with the most potential will be marketed.

 

Doyle's Five Factors in Assessing Segment Attractiveness:

1. Segment size - number of potential customers
2. Segment growth - growing or declining
3. Segment profitability - Porter's 5 Forces
4. Current and potential competitors
5. Core capabilities - strengths and weaknesses of segment

Lastly, we come to positioning. How will the customers within the segment rate the product/service compared to the competition? This is based on customer perception and it is easy to find out how a product compares to another using perceptual maps. The map below is an example of a perceptual map, rating brands on practicality, classiness, sportiness and how conservative they are. This brand is clearly very practical yet still classy, whereas Brand F is seen to be slightly conservative and not so practical. This is obviously a very vague depiction but for this purpose it works- simply to show how one brand relates to another on a perceptual map.

Going back to 'Alexa' and her Dior perfume. Using the above map, replacing practical with high quality and classy with luxurious, the yellow brand is where Dior would aim to be. If sporty was replaced with low quality and conservative with basic, and Dior was Brand C, they would need to reevaluate their image and products.

Other examples of perceptual maps:

To identify where one brand's particular focus should be.

They can also be very detailed.

Coming back to postioning- there are ways a marketer can make their brand stand out against the competition...

• Strengthen the current position - improve a product so that it is preceived as better quality or cooler than the rest (MP3 players... iPods are without question the 'coolest')
• Find an unoccupied position - create a product that does things it competitors do not (Arial washing detergent, working best at a lower temperature)

• Reposition the competition - convincing customers to view your competitor in a different way (Pringles took up a large percentage of the crisps market share until Wise listed Pringles' contents as harsh sounding chemicals while Wise products were simply 'potatoes, vegetable oil and salt'. Pringles went down in market share.)

• Head to Head - competing directly with brands and products offering similar attributes (Compare the Market vs. Go Compare)

Compare the Market  or  Go Compare ?

This whole process of STP leads to the 4 Ps, product, price, place and promotion. From here a product will start being sold to its target market and, if the STP has been well executed, the product should sell well!

Gestalt Theory & The Perceptual Set

Gestalt Psychology

Having explained how colour, contrast, size, juxtapositions, repetition and movement as well as morally stimulating and shock tactics work in advertising, I can now introduce another more scientific theory.

In order to perceive an object, the human brain needs to see a whole image to appreciate it. (Chisnall, P. M., 1995) Marketers leave parts of their advertisement unexplained, leaving the consumer to interpret it. This involves the consumer's brain and our natural instinct to create something whole out of something that is actually incomplete means the consumer will pay attention to the advertisement. This is aptly explained by Solomon et al, "[the brain will] derive meaning from the totality of a set of stimuli, rather than from any individual stimulus” (Solomon et al, 2010, p133)

This concept is called gestalt psychology. This theory is broken up into four sections...

Figure & Ground

This is when the figure is the element that capture attention and the background is largely undistinguished. The human eyes naturally creates a figure (the foreground) and ground (the background). Try it. Look at your hand, everything behind your hand is likely to be blurred. Now focus on an object behind your hand, you will see that it is now your hand that is blurred and the object you are focusing on is clear.

A classic example of this is the vase/ two faces images. Focus on the centre and you will see a vase, then try to see two faces facing each other, the vase has moved into the background.

Closure

A perceiver will naturally form an image out of an incomplete picture.

This panda is stylised, and so missing lines where the panda's body ends. The eye naturally draws the line as seen in the second image. This is called closure, an advertiser can create an incomplete image but be aware that a consumer will create an image.

Grouping

The brain automatically groups items together that are similar in shape or colour. Items are grouped together to form an “integrated whole” (Solomon et al, 2010, p134). For this reason, advertisers will group their products together to have more of a visual effect. I think the following image shows this well; personally, I would be more likely to stop and look at these products if they were displayed like this- but if they were displayed individually, I doubt I would notice them.

Stimulus Ambiguity

The advertiser will create a image or product (stimulus) that is not directly related to a recognisable shape or form so that the customer will have put it into a context to understand it. This engages the consumer as they try to make sense of it. In this image, a child and a chicken would never be able to hold the weight of a fully grown man, the brain is confused as it tries to make sense of the image. This captures a consumer's attention and leads them to be curious about what is being sold.

These are all effective ways of grabbing a consumer's attention, sometimes before they even realise how much thought is actually going into the image. Gestalt psychology focuses on manipulating the brain and utilising the way it works in order to make an advertisement stand out. Combined with the aforementioned, more simple methods, a successful campaign can be created.

Perceptual Set

Gestalt psychology and all other methods used in advertising rely heavily on the perceptual set. The perceptual set works as a selector and interpreter and is developed over time. It is influenced by personal experiences, upbringing, values, beliefs, and traditions... it is an innate way of thinking. Every person will have a unique perceptual set simply because no two people have lived the same life.

Despite being very personal and deep rooted, the perceptual set can be influenced my marketers. For example, the following clip is an advert for the NSPCC. Take a look: NSPCC Advert 2010

For somebody who has the mindset of "It's someone else's problem, not my issue.", this commercial might make them think that maybe they should get involved, perhaps they should alter the way they think. For another person who may be hitting their children and never saw a problem with it, they may see these actors and think twice about their actions. They may choose to get help and consequently change their beliefs. This means their perceptual set has changed because of a piece of marketing material.

* Chisnall, P. M. (1995) Consumer behaviour. 3rd ed. Maidenhead: McGraw- Hill.

* Solomon, M.R., Bamossy, G., Askegaard, S and Hogg, M. K. (2010) Consumer behaviour: a European perspective. 4th ed. Harlow: Pearson.