By Nancy Garberson / Guest Editorial
Segmentation, targeting and positioning – known by many marketers as ‘STP’ – together comprise a three-stage marketing process built upon our understanding of our customers’ needs and wants. We decide who would be our best customers, and then we find the best marketing practices to reach that specific audience. By communicating to a specific group, we’ll reach the proper decision-makers who have more potential to purchase. Let’s take a look at each step in a little more depth.
Segmentation involves discovering what kinds of consumers exist as our potential customers.
An example can be found in the Internet market, where some consumers want speed and performance so they can download Netflix or Hulu or play online games. At the same time, not all customers are interested in having the fastest speeds possible because they may only use their service for email and social media. This means Internet service providers must divide those types of customers into categories in order to effectively market their services. That may mean different levels of service, speeds and bandwidth.
Subdividing a large market into recognizable segments having related needs, wants or demands will make your marketing efforts more targeted in nature. Likewise, designing a marketing mix that matches the expectations of customers in each segment will save time and money.
Most organizations divide demand into segments and go after those that the company is best prepared to serve. Segmentation includes asking:
1. What is the evident segment for your products or services?
2. Is the segment measurable?
3. Is it accessible with publicity?
4. Is it a good fit for the company?
Segmenting your potential audience will mean making some difficult but crucial decisions, including deciding which variables will be most useful in grouping your potential customers.
Sticking with Internet service providers as an example, they must decide what attributes they provide better than their competitors and concentrate on the audiences asking for those attributes. There are many factors to consider here. For example, how well are current segments served by other Internet service providers? How large is the segment, and what growth potential does it provide? What strengths can the provider leverage to appeal to a specific group of customers?
After segmenting the market, you need to select your target audience. Developing marketing strategies with target markets in mind is very important. By concentrating your targeting efforts, your marketing efforts will remain focused on a particular group of people, ultimately improving your campaign’s effectiveness.
Since we are now focusing on specific market segments, we must thoroughly understand their needs. A great way to learn more about your intended market is to conduct some research. There are many ways to research your intended group – through an online survey, focus groups, and even reaching out to them with directed emails with links back to survey questions. The important part is to collect information and then compare it to the assumptions you’ve made about your customers. What’s unexpected? Are there any untapped opportunities?
This is a good time to create an identity of the perfect customer for your business and conduct a SWOT analysis, so you can improve your business strategy. Remember that for every weakness and threat, there are opportunities lurking for those who look for them.
Positioning is escalating a brand image in the minds of potential customers. This includes everything you do, from the way your company looks, your materials, your website and the way you reach out to potential customers in your marketing efforts. It also includes your customer service and the way you interact with your current customers.
Depending on your intended target audience, this positioning can be spread locally, regionally or nationally. Positioning is the way customers and potential customers see your organization mentally – what place do you hold in your audience’s judgment?
Improving a customer’s opinion is critical to continued business success. The good news is that organizations can clearly influence those opinions through tactical, persuasive actions, whether it’s through educational blogs, value-added benefits or special treatment that earns trust.
Active positioning requires that you identify the distinctive benefits that your business delivers. An organization’s objective is to define itself so that customers see it the way it wants to be seen. If you are the higher-cost alternative, make sure your benefits outweigh the low-priced, lower-quality alternative, because value and results mean more than a cheaper price tag.
In short, don’t forget your STP to reach specific audiences in cost-effective ways!
Nancy Garberson is the owner of Marketing & Communication Strategies Inc., in Cedar Rapids and an adjunct professor at Mount Mercy University, teaching managerial marketing in its Master of Business Administration and Master of Strategic Leadership programs.