Assessment Two MKTM028: STP

 

 

 

Table of Contents

Contents

Introduction. 2

Critical Evaluation of Segmentation in the Appraisal and Development of 2

Critical Evaluation of Targeting in the Appraisal and Development of 4

Critical Evaluation of Positioning in the Appraisal and Development of 5

Critically Appraise how Segmentation, Targeting, and Positioning has been Applied to Develop Solutions to Strategic Implementation Issues. 6

Conclusion. 7

Reference List 7

 

 

 

 

 

 

Introduction

 

In the contemporary time of modern marketing, Segmentation, Targeting, and Positioning (STP) is an influential strategic approach towards the development of marketing strategies and measurements. It is referred to as one of the commonly applied alluring marketing models emerging as the second-best marketing tool just after SWOT or TOWs analysis. This audience-based approach has proven to be beneficial for the improvement of many organizations’ marketing strategies. This paper has been structured to delve into the various aspects of this marketing tool in regards to some of the prestigious companies existing in the current marketing industry. In this study, each of the components of STP has been adequately evaluated and critically analyzed with specific illustrations drawn from different sectors ending with a concluding section aligning with the purpose of this paper.

 

This titular marketing model of Segmentation, Targeting, and Positioning (STP) consists of three major components. According to the objectives and needs, companies adhere to this strategic tool to communicate and reach out to a commercially approachable audience. It functions by segmenting the market based on its consumers at first and then developing the marketing strategy and positioning the products. Below each of the steps or components is analyzed with appropriate examples and its implementation in various organizations’ marketing industry.

 

Critical Evaluation of Segmentation in the Appraisal and Development of

Marketing Strategies

 

Segmentation refers to dividing the potential market into segments or groups following the characteristic traits of its consumers. The people allocated in a single group share a set of similar characteristics and choices that align with the company’s communicating message as targeted to them. According to Camilleri, 2018, segmentation has been successful in incorporating a sense of importance and value to the customers as it helps make the customers feel like they are getting directly communicated by the company. Segmentation produces specificity sales, as demonstrated in a report by Jan and Victor, 2019, proclaiming that segmented email campaigns had higher open and conversions rates (14.3%) and lower unsubscription rates non-segmented campaigns for the company Hubspot.

 

There are four significant types of segmentation processes, and these types can be categorically classified according to different factors and drivers of the marketing status. These are evaluated below –

 

1. Demographic Segmentation: It is the purest form of segmentation and, to date, the most commonly used. Organizations tend to divide the market into segments based on various demographic criteria such as age, location, sex, class, religion, gender, occupation, income, etc. There are ample examples of demographic segmentation as follows –

 

• Alcoholic beverages company Diageo has segmented its consumers on the criteria of age, which is 21 and above. Thus, under 21 are unnecessary for the products of the company, and focus has only been given to the group of the people aged 21 or above.
• The airline company Emirates-based its marketing segmentation according to the class of the travelers. For example, it provides different services to economy class ticket holders and first-class ticket holders, emphasizing the latter’s luxury and comfort, as commented by Moges, 2017. According to this, the company has chosen to reach out to its customers via different means, like for the economy class, they have selected TV advertisements.

 

2. Behavioral Segmentation: This type of segmentation explores the ways customers make decisions and take actions. The customers’ activities give hints to their possibility of interaction with the company, as stated by Astina and Mawardi, 2016. The factors on which behavioral segmentation is based are usage, loyalty, engagement, habits, special events, and occasions. Examples of this kind are –

 

• The car manufacturing company, Toyota Motor Corporation, has segmented the market based on its customers’ activities in the previous three years. In this way, they focus more on the customers who have bought a high-budget car in the last three years.
• Companies tend to provide discounts and offers to their customers on special occasions and holidays like Christmas, the 4th of July, etc. H&M has been giving special discounts on the purchase of clothes in Christmas week to attract more customers.

 

3. Geographic Segmentation: As the name suggests, geographic segmentation is based on the consumers’ physical locations because the needs and demands of people vary from place to place. As commented by Suyanto, 2019, it is also a way to deal with the local customers in a specific way and work on the native language and tone to communicate with them effectively. In this case, the defining factors are country, city, region, population density, weather, etc. Examples of this type are –

 

• The beverage company Coca-Cola has been concentrating on the customers living in hot climatic countries like the Middle East and Africa, where the demand for cold drinks is higher than that of the cold countries like in Europe or the Northern part of the US.
• Companies are likely to change the name of its products according to the local language, like soda, which is called coke in Georgia, whereas it is called pop in Chicago.

 

4. Psychological Segmentation: It is chiefly based on the lifestyle attitudes, opinions, values, and preferences of the consumers, as per Anatasia, 2019. It explores the psychological aspects of people, such as what and why people are opting for. It needs research and not databases or information. Instances of this kind are –

 

• As mentioned by Wowiling et al., 2017, upon observing people’s likings towards personalized banners, Lenovo, in partnership with Neustar, created personalized banners for the homepage of the company’s official website increasing click-through rate (33%) and conversion rates (40%).
• Starbucks has started to write the names of the customers on the cups who tend to like this gesture. It is an effective way to attract and satisfy that specific group of customers.

 

 

Critical Evaluation of Targeting in the Appraisal and Development of

Marketing Strategies 656

 

Targeting as a marketing tool comes after segmentation, which refers to targeting a specific segment or group of audience and implementing the targets following the characteristic traits of that segment or group. According to Hidayat, 2017, it solely focuses on providing services to that specified group instead of trying to reach out to the entire audience of the market. Through market segmentation and evaluating the segmented groups, a company gets more information about its target market, which helps them come up with useful strategic measurements. For instance, a company selling day planners can focus more on selling its planners to female business owners or high school teachers as they form a specific segment in the company’s entire potential market.

 

Targeting is an essential part of a holistic marketing strategy improving brand awareness, advertising, business operations, and customer experiences as it gives plenty of scopes to communicate with a defined audience directly, attract quality leads and their conversions and establish firm customer policies. In this regard, there are specific steps according to which the commercial and potential attractiveness of every segment needs to be evaluated, as stated by Jamira, 2017. These are –

 

• Segmentation of the market where customer groups are formed based on their demographic, behavioral, geographic and psychological patterns,
• Identification of Unique Selling Proposition (USP) which differentiates the company’s services and products from its competitors,
• Analyzation of the company’s customer base and its competitors’ by collecting necessary data and selecting a similar or different target market,
• We are releasing an MVP to validate the target market’s assumption to get possible feedback from the customers.

 

Some of the most significant examples of targeting in marketing are –

 

• Although in the beginning, Facebook set the college students of the US as its target audience, in the course of its expansion, it has broadened its target market and established itself as one of the popular social media platforms targeting a group of mobile users aged between 25-34 years in 157 different countries, as per the report of Sari, 2019. In this case, Facebook selected the criteria of age, informing the groups of the target audience.
• BFree Foods is a gluten-free food manufacturing company targeting people with diabetes or food allergies. In this way, this company can specify its target audience and work on increasing its sales and profitability.
• McDonald’s segmented its customers according to their age and choice of food, which helped create different menus for different groups of customers. The group of young people aged between 16-30 brought most profits to the company, so they decided to target and focus on this segment.

 

 

Critical Evaluation of Positioning in the Appraisal and Development of

Marketing Strategies 656

 

Positioning comes at the last in the overall process of STP. In the contemporary time of the globalized economy, the establishment of a brand positioning is crucial to grab the target audience’s attention and hearts. According to Asdi et al., 2019, it refers to the process of union between differentiating and segmenting, which leads to occupying a significant position by the company at the center of a particular market segment. It means offering something different and unique to convince the customers to opt for the brand. However, it is essential to remember that brand position is not necessarily an action but a continuous process to incorporate subjective values and product quality into the company’s services and products.

 

Several great companies have opted for brand positioning effectively to boost sales and increase revenue, proving the fact that positioning is one of the crucial marketing tools in this digitized age. Here are such instances of successful brand positioning.

 

• The company Dove has conclusively established its positioning in the market against its competitors. It has initiated several campaigns, the most important of which is its recent campaign towards the admiration of women’s natural beauty. Through a process focused chiefly on the emotional states of the consumers, as stated by Maharani, 2016, Dove successfully reached out to the people who have identified its intended message. An instance of this kind is the Real Beauty propaganda wherein women were asked to describe themselves to a professional artist who portrayed them. Then acquaintances of them were invited to do the same, and the artist drew better portraits of the women from the descriptions of their acquaintances. This was an innovative technique to communicate with the consumers and position the brand name.
• Coca-Cola has demonstrated one of the great examples of positioning. The effective segmentation, targeting, and positioning method of this company have resulted in its business of more than 125 years. Through its various approachable campaigns like “Open Happiness’, “Drinking a Coke with,” “The Coca-Cola Side of Life” etc. were sufficient enough to grab the attention of its customers and to establish its reputation in the marketing industry, as mentioned by Mananeke and Rogi, 2018. This company’s positioning strategy promotes a sense of engagement and encouragement among its consumers by relying on subjective values like happiness, joy, friendship, sharing, etc.
• Apple is mainly known as a brand for its exclusivity, elegance, and luxurious features. It can be perceived in its products, styles, services, stores, and websites, as said by Warouw et al., By conducting exciting campaigns such as “iPod people,” “Mac campaign,” Apple now is dominating the technological market of the world as its brand positioning served as a basis for all its past, present, and future campaigns.

 

 

Critically Appraise how Segmentation, Targeting, and Positioning has been Applied to Develop Solutions to Strategic Implementation Issues.

 

Consisting of three elements, the STP model is a widely considered business and marketing tool to identify and select potential consumers and communicate with them through distinctive product benefits and services. The application of STP model adds value and enhances marketing efficiency and performance. According to (), STP is particularly helpful in increasing the efficiency of ‘fuel’ (capital) in terms of the organizational objectives, as stated by Gonchar et al., 2019. In this regard, the STP process acquired by PepsiCo is particularly essential.

 

• Segmentation by PepsiCo: In this stage, the broader market of its customers were divided into smaller segments. In this regard, this company has adopted a multi-segment approach to target more than a single consumer group. In addition to this, the determination of the bases and development of the segments’ profiles following the needs and demands of the consumers also take place in this stage. Active research was also done to ensure the correction of those segments.
• Targeting by PepsiCo: After segmentation, it is essential to decide which segment is needed to be focused and which is not. Therefore, the evaluation of every section takes place in this step to determine values and qualities in it. Additionally, market attractiveness has been identified, and strategic measurements are planned and developed as well. After the completion of these steps, PepsiCo decides which segment to target and pursue.
• Positioning by PepsiCo: In this step, a minute marketing mix has been developed along with a USP for a better understanding of the segments. The strategic choices are mainly based on domestic or international region, male or female gender, average or high income, personality, degree of loyalty, social class, lifecycle, occupation, etc.

 

Conclusion

 

Segmentation, Targeting, and Positioning are one of the essential marketing tools in contemporary time. If implemented correctly, it can be incredibly useful in boosting the company’s profitability and driving its organizational growth. By the development of new offerings, avoidance of fierce competition in the market and redistribution of the investment and sales, STP is a crucial method to identify the current trends of the consumer, to adapt the elements of the marketing mix including prices, channels, promotional activities and to act following it. In sum, this paper has been composed to assess and analyze these significant aspects of STP by referring to the actions and activities of some prestigious companies regarding this method. Therefore, this study has been successful in evaluating the conceptual model of STP and in offering an overview of recommendations for this model through the implementation of it by different industries.

 

Reference List

 

Anastasia, L., 2019. SEGMENTATION, TARGETING, DAN POSITIONING OLEH PUBLIC RELATION (Studi pada Pencapaian Target Wisatawan 2019 Melalui Program-Program Wonderful Indonesia di Kemenpar) (Doctoral dissertation, Universitas Pembangunan Nasional Veteran Jakarta). Accessed from: http://repository.upnvj.ac.id/2077/1/AWAL.pdf

 

Asdi, A., Adziem, F. and Rosnaini, R., 2019. ANALISIS PEMASARAN MOBIL MAZDA PADA PT KUMALA CELEBES MOTOR MAZDA MAKASSAR DENGAN MENGGUNAKAN STRATEGI SEGMENTATION, TARGETING, POSITIONING. BRAND Jurnal Ilmiah Manajemen Pemasaran, 1(1), pp.46-55.  Accessed from: http://ejournals.umma.ac.id/index.php/brand/article/download/224/148

 

Astina, S.T. and Mawardi, M.K., 2016. Analisis Segmentation, Targeting, dan Positioning dalam Rangka Meningkatkan Daya Saing Melalui Strategi Pemasaran di Toko Pia Cap Mangkok Cabang Semeru. Jurnal Administrasi Bisnis, 39(2), pp.57-66. Accessed from: http://administrasibisnis.studentjournal.ub.ac.id/index.php/jab/article/download/1560/1942

 

Camilleri, MA, 2018. Market segmentation, targeting, and positioning. In Travel marketing, tourism economics, and the airline product (pp. 69-83). Springer, Cham. Accessed from: https://www.um.edu.mt/library/oar/bitstream/123456789/21433/5/Market%20Segmentation%20Targeting%20and%20Positioning.pdf

 

Gonchar, V., Gorokhova, T. and Ponomarenko, A., 2019. Segmentation and positioning in the marketing practice of the company. Accessed from: http://eir.pstu.edu/bitstream/handle/123456789/25018/6.pdf?sequence=1

 

Hidayat, R.S., 2017. Analisis pengaruh strategi segmenting, targeting dan positioning terhadap keputusan pelanggan membeli Nu Green tea. Jurnal Ekonomika dan Manajemen, 6(1), pp.28-43. Accessed from: https://journal.budiluhur.ac.id/index.php/ema/article/viewFile/336/280

 

Jamira, A., 2017. Analisis Segmentasi, Targeting dan Positioning Studi Kasus Keripik Kentang Leo. Jurnal Ilmiah Universitas Batanghari Jambi, 17(3), pp.235-242. Accessed from: http://ji.unbari.ac.id/index.php/ilmiah/article/viewFile/417/384

 

Jan, A.D.A. and Victor, D.S., 2019. Measuring the Effectiveness of Segmentation, Targeting and Positioning Strategy of L’oreal Products in Kingdom of Saudi Arabia. IJO-International Journal of Business Management, 2(09), pp.68-79. Accessed from: https://www.researchgate.net/profile/Academic_Research/publication/341458649_Measuring_the_Effectiveness_of_Segmentation_Targeting_and_Positioning_Strategy_of_L’oreal_Products_in_Kingdom_of_Saudi_Arabia/links/5ec2829ca6fdcc90d67e25dc/Measuring-the-Effectiveness-of-Segmentation-Targeting-and-Positioning-Strategy-of-Loreal-Products-in-Kingdom-of-Saudi-Arabia.pdf

 

MAHARANI, V.D., 2016. PENERAPAN STP (SEGMENTATION, TARGETING, POSITIONING) PADA PT. HAPPY WEDDING SERVICE SURABAYA (Doctoral dissertation, Universitas Airlangga). Accessed from: http://repository.unair.ac.id/65231/1/ABSTRAK_FV.PM.02%2017%20Mah%20p.pdf

 

Mananeke, L. and Rogi, M., 2018. ANALISIS PENGARUH STRATEGI SEGMENTASI, TARGETING DAN POSITIONING (STP) TERHADAP KEPUTUSAN PEMBELIAN PRODUK BP-SMART PROTECTION DI AJB BUMIPUTERA 1912 CABANG SAM RATULANGI MANADO. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 6(4).  Accessed from: https://ejournal.unsrat.ac.id/index.php/emba/article/viewFile/21970/21671

 

Moges, Z., 2017. Assessment of market segmentation, targeting and positioning practices: The case on Heineken Brewery Ethiopia (Doctoral dissertation, St. Mary’s University). Accessed from: http://197.156.93.91/bitstream/123456789/4567/1/Assessment%20of%20market%20segmentation%2C%20positioning%20and%20targeting%20practices%20-%20The%20case%20on%20Heineken%20Brewery%20Ethi%20%281%29.pdf

 

Sari, D.K., 2019. ANALISIS SEGMENTASI, TARGETING DAN POSITIONING PADA KUE LAPIS KUKUS TUGU MALANG (Doctoral dissertation, University of Muhammadiyah Malang). Accessed from: http://eprints.umm.ac.id/51234/1/PENDAHULUAN.pdf

 

Suyanto, AMA, 2019. Analisis Segmentation, Targeting, Dan Positioning (stp) Transmart. eProceedings of Management, 6(2). Accessed from: https://repository.telkomuniversity.ac.id/pustaka/files/151341/jurnal_eproc/analisis-segmentation-targeting-dan-positioning-stp-transmart.pdf

 

Warouw, G.F., Mandey, S.L. and Wenas, R.S., 2018. ANALISIS SEGMENTATION PSYCHOGRAPHIC, TARGETING, DAN POSITIONING MOTOR YAMAHA R25 PADA PT. HASJRAT ABADI OUTLET SAM RATULANGI MANADO. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 6(4). Accessed from: https://ejournal.unsrat.ac.id/index.php/emba/article/viewFile/20964/20651

 

Wowiling, Y.G., Tumbuan, A.L. and Wenas, R.S., 2017. ANALISIS SEGMENTATION, TARGETING DAN POSITIONING KARTU KREDIT (STUDI PADA PENGGUNA KARTU KREDIT BRI-TOUCH PT. BANK RAKYAT INDONESIA TBK (PERSERO) KANTOR WILAYAH MANADO). Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 5(3).  Accessed from: https://ejournal.unsrat.ac.id/index.php/emba/article/viewFile/17468/17001