What is Segmentation, Targeting, and Positioning (STP) ?

STP often used before marketing programs are planned. STP is related with market research and marketing research. STP uses information about current market size, market shares, concentration of customer base for particular products, potential customers, customer's purchase decision process that gathered from market and marketing research to find out kinds of consumers with different needs, different characteristics, and etc (this is known as Segmentation). For example in the auto market there are consumers that need speed and performance, there are consumers that need safety and luxurious, there are consumers that need an economical auto, there are consumers that need the combination of some needs that have been described, there are consumers that want to have their own imagination car or modified car special for themselves, and etc. In the auto market there are consumers with high, medium, and low purchasing power too. There are some variables that often used to segment various consumers. Demographic segmentation is consumers segmentation based on: income, gender, marital status, education, etc while psychographic or behavioral segmentation is consumers segmentation based on lifestyles, opinions and attitudes, degree of loyalty, consumption occasions, usage consumption, and benefits sought. After finding out kinds of consumers the next thing to do is deciding to target a kind or some kinds of consumers (a segment or few segments of consumers) (this is known as Targeting). There are 3 considerations in choosing target segment(s): 1. how well existing segment(s) treated by competitors, 2. how large the market size of the segment is, how good it's potential, and how easy and how big it will grow in the future ?, 3. do the company has enough strengths to appeal one or more group of segment(s)?. The next step in STP is positioning the product or the company to appeal target segment(s). There are 3 strategy for it: undifferentiated, concentrated, and differentiated strategy. In the undifferentiated strategy all consumers is treated the same or a product for all customers, for example is a company supply same aluminium commodity to various household tools producers. In the concentrated strategy a product is positioned to serve customers' specific needs, for example Volvo is positioned as safety and luxurious car to serve a high-class target segment that has high consideration on safety, or Southwest Airlines is positioned as an airways that makes people fly to serve price sensitive passengers that needs to fly in a low price. In the differentiated strategy a product is positioned differently for each target segment, for example nowadays many airlines provide economy and business class for their customers.

8 Marketing Communication Functions

Eight marketing communication functions are: advertising, public relations, sales promotion, direct marketing, personal selling, packaging, events and sponsorships, and customer service. Those eight functions are used by marketers when they are designing marketing communication mix as one part of their marketing programs. Brand messages are delivered to customers via one, some, or all of those eight functions or 'methods'. Those eight functions need the right media to send brand messages effectively and efficiently. Let's see each of eight marketing communication functions:

What is 7P ?

4P is not enough, because nowadays service or non-service products need to be treated in more complex ways and involve more men, more processes, and more creative ideas to be implemented nearby that product so that customers aware of it, would love to buy it, buy it often, and finally become loyal customers. Booms and Bitner added 3 additional mix to the Marketing Mix, that are: People, Process, and Physical Evidence. That 4P + 3 is called as 7P.
People: All men or women that are directly or indirectly involved in the consumption of a product and those people add significant value to the service or non-service product offering. The questions that needs to be addressed by marketers and other functions in the company are questions about who are the people that shall stand nearby the product to explain about the product's functionality? what kind of expertise that needs to be mastered by those people that stand nearby the product so that those people can influence customers to come by and finally become one of their loyal customers? is it needed to train those front people any additional knowledge or expertise? and etc.
Process: Mechanism by which the service or non-service products are consumed. The questions that are related with it are: how do customers find out the product? how they consume the product, are they consuming the product all at once or in few times (not all at once)? how frequent the product is consumed? and etc.
Physical Evidence: Nearby environment including all things in it that helps marketer or front salesman/salesgirl to communicate the product's features, to perform the service, and etc. Physical evidence is environment where the product meets potential and existing customers and that environment shall be able to relay the existing customer's satisfaction to potential customers so that they are willing to buy and consume the product. Layout and design of the environment add significant value to the perception of the customers. If the design of the nearby environment is luxurious then customers can start to perceive that products shown or sold there are expensive and exclusive products. If the cleanliness of an environment is preserved then customers can perceive that products that sold there are more clean and safe than products that sold in the vile traditional market.

What is 4P ?

4P that is popular as term Marketing Mix is a set of correlated that work together to achieve what marketer wants, that are the product is sold, customers need or want that product so much, the product sales is increase, and at the end the company enjoys profit. 4P consists of Product, Place, Promotion, and Price.
Product: What is the functionality of the product? What are the accessories of the product? How about if the product that customer bought is broken, is there any reparation and support? How is the package of the product? and many more questions that related with the attributes of the product that needs to be addressed by marketers together with other functions in the company.
Price: What kind of pricing strategy that will be used (skim, penetration, etc.)? Is there any discount for it? Is the discount for large volume buyers or for each retail buyers? Is the company going to suggest the retail price to the retailers or is the company giving retailers a chance to set the price themselves? and many more questions that related with how much the customers want to sacrifice to get the product are needs to be addressed by marketers together with other functions in the company such as finance department, operation department, and etc.
Place: What kind of distribution channels that suitable for the product? Is the product going to be sold in mass channels or in limited and private channels? How is the market coverage for each channels? Do the company needs to develop distribution centers that close to each private owned stores or other channels? and many more questions about where and how the product is placed nearby the customers that needs to be addressed by marketers and other functions in the company, e.g. distribution department.
Promotion: What kind of promotional strategy (push or pull) that suitable for the product? Do the product needs to be advertised in multimedia or just specific in a media? Do the product needs to be advertised for mass customers or just for specific targeted potential customers? Do the promotion for the product combined with IMC so that not only the product is sold but also the brand is becoming popular? and many more questions about how and when information about the product delivers to customers?

What is IMC ?

IMC is an abbreviation for Integrated Marketing Communication, which is an integrated ways to communicate your marketing strategies, started from IMC planning, its implementation to its brand message delivery. IMC is related with synergy, creativity, and integration between marketing communication functions, media, and those continuous IMC processes. Briefly, the process model IMC can be seen in below figure.

What is Marketing Communication ?

Few or perhaps all of you know what the 4P (Product, Place, Price, Promotion) or 7P (4P++ Process, People and Physical Evidence) is. 4P and 7p is related with the creation of product and all things nearby product’s attraction so that the product has high quality and it is expected able to fulfill the customers’ needs or wants. The question is how the fate of a product if customers don’t know it? Is it going to be sold well? The most logic answer is that product will fail in markets. Do not expect even that much that its brand become popular, because the product can’t be sold well. Now then marketing communication is crucial here. Marketing communication is a mechanism to inform, introduce, or popularize qualities that a product has and its brand. The analogy related with writing world including blogging world is a person called “A” has brilliant ideas, and by writing his/her ideas in email groups, magazine, and also blog then A’s qualities and A as a personal brand become popular. What the marketing communication delivers is brand messages. Brand messages are not about the brand but also all things that the brand promises that can satisfy customers’ needs or wants. Brand messages are delivered to customers through eight marketing communication functions.

What is Brand ?

Brand is a name, a term, a sign, a symbol, a pattern, or combination of those things that can differentiate products (goods or services) that you sell with competitors’ products and that delivers promises to customers. Strong brand in the mind of customers can be achieved when: first that brand is memorable in the mind of customers as something with high quality and it delivers promises to the customers that are different with other brand competitors’ promises and those promises that the brand delivers are needed or wanted by customers. Brand is so powerful when its customers are loyal and actively become evangelists of that brand. They become evangelists when they are starting to spread the information about that brand to their friends, families, and colleagues and asking those people to try that brand.

What is Brand Equity ?

Hmm, what is Brand Equity, what are it's differences with brand?. Brand Equity is the value of a brand that is felt or thought by customers. For example, I personally as one of the Coca-Cola’s consumers think that the brand of Coca-Cola is kewl, suitable for hanging out, but ‘toxic’ a.k.a is not healthy for the body if I drink it too much n too often. Brand Equity is a connector between what customers felt about a brand in the past, in the present, and in the future. If Brand Equity of a product in the past is good then with doing marketing programs and IMC that don’t change drastically the value of that brand in the customer’s mind then its Brand Equity in the future will be good too or shall be better than its in the past.