ADV 318J Study Guide - Midterm Guide: Search Engine Optimization, Experian, Golf Channel
Win new customers
Reinforce the habits of existing customers
Advertising in its many forms is always sponsored for a reason
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Advertising requires you to know who you want to reach. TARGET AUDIENCE is key!
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Reaching potential customers just as they are experimenting in a product category for the
first time is important (first-time users.)
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First time users are not heavy users but they are the future.
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Developing advertising campaigns to win with first-time users is often referred to as point-
of-entry marketing.
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Folgers’ slogan “The best part of waking up is Folgers in your cup”
A short film, titled “Happy Mornings: The Revenge of the Yellow People.” Was
produced to show Folgers as your first line of defense when the fanatical Yellow
People try to invade your space first thing in the morning
ZERO dollars were spent on media.
E.g. of Folgers creating an advertising initiative to attract just-graduated-20-somethings as
they move on into the “real world” and have to brew their own coffee at home and start
developing coffee habits.
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STP Marketing: Critical process from our stand point because it leads to decisions about
who we need to advertise to, what value proposition we want to present to them, and how
we plan to reach them with our message.
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Introductory Scenario: How Well do you "Tolerate Mornings"?
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Target Segment is the subgroup (of the larger market) chosen as the focal point for the
marketing program and advertising campaign.
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Markets are segmented; Products are positioned.
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Positioning is the process of designing and representing one’s product or service so that it
will occupy a distinct and valued place in the target consumer’s mind.
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Positioning strategy involves the selection of key themes or concepts that the organization
will feature when communicating this distinctiveness to the target segment.
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Segmenting (Breaking down diverse markets into manageable segments) Targeting
(Choosing specific segments as the focal point for marketing efforts Positioning (Aligning
the marketing mix to yield distinctive appeal for the target segment.
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STP Marketing: The Segmenting, Targeting and Positioning sequence of activities that
represent a sound basis for generating effective advertising.
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The STP approach is strongly recommended for markets characterized by diversity in
consumers’ needs and preferences.
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In markets with any significant degree of diversity, it is impossible to design one product
that will appeal to everyone, or one advertising campaign that will communicate with
everyone.
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Age alone is rarely specific enough to serve as a complete identifier of a target
segment.
Many factors beyond demographics can come into play when trying to identify valid
target segments. (e.g. lifestyles, attitudes, and basic values)
STP marketing is a lot more complicated than just deciding to target a particular age:
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Even STP Marketing yields profitable outcomes, one must presume that success will
not last indefinitely.
Beyond STP Marketing
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STP Marketing and the Evolution of Marketing Strategies
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Chapter 6: Market Segmentation, Positioning, and the Value
Proposition
Wednesday, October 24, 2012
5:31 PM
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not last indefinitely.
Shifts happen- consumer preferences shift. Competitors must improve their
marketing strategies, or technology changes.
A more detailed examination of the current target segment to develop
new and better ways of meeting its needs, or it may be necessary to
adopt new targets and position new brands for them.
1. Reassessment of the segmentation strategy.
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Product differentiation focuses the firm’s efforts on emphasizing or even
creating differences for its brands to distinguish them from competitors’
offerings.
2. To pursue a product differentiation strategy.
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To maintain the vitality and profitability of its products or services, an organization has
two options:
Successes realized through proper application of STP marketing can be short-lived in
highly competitive markets where any successful innovation is almost sure to be
copied or “one-upped” by competition.
STP Marketing must be pursued over and over again and may be supplemented with
product differentiation strategies.
Advertisers must be able to identify the media the segment uses that will allow them
to get a message to the segment.
The first step in STP marketing involves MARKET SEGMENTATION: breaking down large,
heterogeneous markets into more manageable submarkets or customer segments.
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Markets can be segmented on the basis of usage patterns and commitment levels,
demographic and geographic information, psychographics and lifestyles, or benefits sought.
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One of the most common ways to segment markets is by consumers’ usage patterns
or commitment levels.
It is common to find that heavy users in a category account for the majority of a
product’s sales and thus become the preferred or primary target segment.
Devoted users may need no encouragement at all to keep consuming.
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Heavy-user focus takes attention and resources away from those who do need
encouragement to purchase the marketer’s brand.
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Downsides to heavy-user focus:
Most important, heavy users may differ significantly from average or infrequent users
in terms of their motivations to consume, their approach to the brand, or their image
of the brand.
Nonusers: offer the lowest level of opportunity relative to the other three groups.
Brand-loyal users: A tremendous asset if they are the advertiser’s customers, but they
are difficult to convert if they are loyal to a competitor.
Switchers (variety seekers): Often buy what is on sale or choose brand that offer
discount-coupons or other price incentives. Considered the costly target segment.
Emergent consumers are motivated by many different factors, but they share
one notable characteristics: Their brand preferences are still under
development.
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(e.g. Folgers’ rationale in targeting just-graduated-20-somethings & banks
Point-of-entry Marketing: Developing advertising campaigns to win with first-
time users.
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Emergent consumers: Offer the organization an important business opportunity. In
most product categories there is a gradual but constant influx of first-time buyers.
Generation X attracted the attention of markets and advertisers because it was a large
group of emergent adult consumers. But inevitably, Generation X lost its emergent
status and was replaced by a new age cohort- Generation Y –who took their turn as
advertisers’ darlings.
Usage Patterns and Commitment Levels
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Identifying Target Segments
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(e.g. Folgers’ rationale in targeting just-graduated-20-somethings & banks
recruiting college students who have limited financial resources)
Demographic Segmentation: Widely used in selecting target segments and includes
basic descriptors such as age, gender, race, marital status, income, education, and
occupation.
1. Demographics are commonly used to describe or profile segments that have
been identified with some other variable.
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(e.g. of demographic group that is receiving renewed attention from
advertisers is the “woopies,” or well-off older people.)
2. Demographic categories are used frequently as the starting point in market
segmentation.
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Demographic information has two specific applications:
Geographic Segmentation: Identifies neighborhoods (by zip codes) around the
country that share common demographic characteristics.
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PRIZM: Potential rating index by zip marketing –identifies 62 market segments
that encompass all the zip codes in the United States.
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Geographic Segmentation
Demographic Segmentation
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Psychographics: A term that advertisers created in the mid-1960s to refer to a form of
research that emphasizes the understanding of consumer’s activities, interests, and
opinions (AIOs).
Lifestyle Segmentation: A focus on consumers’ activities, interests, and opinions often
produces insights into differences in the lifestyles of various segments.
Chase & Grabbits: 26% of the population, they are heavy users of all forms of
fast foods.
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Functional Feeders: 18% of the population, they are a bit older than the Chase
& Grabbits but no less convenience- oriented. More likely to have families, their
preferences involve frozen products that are quickly prepared at home.
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Down-Home Stokers: 21% of the population, Involve blue-collar households
with modest incomes. Very loyal to their regional diets. Champion of
cholesterol.
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Careful Cooks: 20% of the population, Replaced most of the red meat in their
diet with pastas, fish, skinless chicken, fresh fruits and vegetables. Nutritional
issues!
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Happy Cookers: 15% of the population, A shrinking segment that include family
oriented and take substantial satisfaction from preparing a complete
homemade meal for the family.
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Five segments of the population:
The eight VALS Segments: (See Exhibit 6.10) pg. 219
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VALS (“Values and Lifestyles”): VALS segments are organized in terms of resources and
primary motivation.
Psychographics and Lifestyle Segmentation
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Benefit Segmentation: Target segments are delineated by the various benefit
packages that different consumers want from competing products and brands.
Benefit Segmentation
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Consumer markets: The markets for products and services purchased by individuals or
households to satisfy their specific needs.
Business markets: The institutional buyers who purchase items to be used in other
products and services or to be resold to other businesses or households.
Segmenting Business-to-Business Markes
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Most fundamental criterion in segment selection: What members of the segment want
versus the organization’s ability to provide it.
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Another major consideration in segment selection: The size and growth potential of the
Prioritizing Target Segments
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Document Summary
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