MKTM028 AS2 Feed-forward advice
Check your feedback from AS1 and incorporate the learning from this to improve your performance further in AS2. In addition, here is some feedforward advice for AS2
AS2 Contents Page advice:
This is a report, so a contents page is required. Structure this around the brief:
1. introduce the subject, defining STP then have:
2. a sound theoretical and conceptual perspective, containing evidence of critical debate on STP with reference to appropriate academic literature, including implementation issues
3. sound examination of STP and its application in industry, with supporting evidence, use appropriate examples from different industries (plural) to exemplify how different organisations (plural) have applied STP
4. generic management recommendations (for all organisations, not just your industry examples)
This should be 2400 words +/- 10% excluding references (at least 10 academic journal articles) – read the AS2 brief carefully, especially the grading criteria and mark scheme. Your Assessment and critique of the STP concepts is worth 30%, industry application examples 40%, generic recommendations 10%. Quality and amount of research is worth 10%, Harvard citing and referencing 5% and presentation 5%.
General Report Guidance
This is an individual assessment in the form of a report and should include:
• A Title Page
• A Contents Page
• Use Section and Sub-Section Numbering and Headings
• References (in alphabetical order in consistent Harvard style)
• Appendices (if required, should be titled and referred to within the report)
• Use Page Numbers (except for the title page)
• Paragraphs should have justified alignment and be 1.5 line spaced
• Tables, Figures, Models (if required, should be titled and referred to within the report)
• Do NOT write in the 1st/2nd person, use 3rd person.
See second half session materials which are all related to successfully completing AS2.
Here is a sample of feedback points from tutors:
• poor reports were too descriptive and explanatory – merely explaining the S-T-P process and not critically evaluating its effectiveness in improving business performance, its value/advantages, the ease/difficulty of application…..Better reports made an attempt at a critical discussion including an awareness of implementation barriers and solutions.
• poor reports were too dependent on textbooks and dated references for their source material. Textbooks lag current thinking….better reports showed an attempt to engage with the current academic literature.
• in exploring the application of S-T-P to industry, poor reports showed limited research and a strong tendency to focus on specific products or product categories, rather than market segments. Product categories – small hatchback cars – are not market segments……Better reports showed real insight into the practical value of S-T-P as a foundation of strategy.
• be careful with your ‘positioning’ piece. Poorer reports just use a positioning map with generic price/quality axes when this was not the company’s stated differentiators…. better reports show a more informed and researched consideration of positioning strategy and points of difference and promises used.
• poor reports did not read the brief carefully and provided examples from one industry sector rather than two or more sectors
• poor reports failed to generate management recommendations that had power and conviction. One or two did not offer the generic recommendations required, but focussed on the selected industry examples.
• other issues – unclear English, proof reading required, lack of correct Harvard referencing, irrelevant theory and sources, balance of content not reflecting the marks on the Rubric.
There is a lot of extra support available on the NU Skillshub to help with researching and writing a good report and critical literature review:
Good luck with your reading and writing on STP – hopefully you will find this interesting and useful.
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Strategic Marketing; Segmentation, Targeting and Positioning
By (Student’s Name)
Course Code: Course Title
Professor’s Name
Name of the School (University)
The city and State
The Date
Strategic Marketing; Segmentation, Targeting, and Positioning
Introduction
When discussing market segmentation, it is important to pinpoint what criteria were applied to divide the market into its many subsets. The market as a whole has been broken down into more manageable subsets, which has improved customer service. However, the term “Targeting” suggests entry into the market sectors that are viable or feasible (Kokemullar, 2018). The study’s primary objective is to determine whether or not the various market sub-segments stimulate the targeted industry. The term “Positioning” instead refers to the decision to determine whether or not the products are in place and where the products stand in the larger markets (Chowdhury, 2013). The marketing mix approach can then be implemented in each market to evaluate its efficacy. Thus, it is safe to say that in modern marketing, the terms “Segmentation,” “Targeting,” and “Positioning” all relate to the same overarching strategy.
The market mix strategy is universally acknowledged as the most common and well-liked when discussing market strategies. In market penetration, SWOT Analysis trails only the marketing mix technique in terms of popularity and frequency of use. A SWOT analysis is considered more up-to-date than traditional methods because it analyses a company’s products rather than its customers. Segmentation, in this context. Strategic targeting and positioning (STP) in the current market landscape cannot be overstated. As a result, STP encourages businesses to focus on their customers rather than the things those consumers purchase (Chowdhury, 2013). The study’s three parts contribute to growth in the domestic market. Specifically, “Segmentation” allows them to track the evolution of demographic, psychographic, and other similar categories (Althuizen, 2018). When we talk about “Targeting,” we refer to the process by which a business determines which market niches it should focus on and whether or not those niches will yield a commercial return (Althuizen, 2018). Finally, “Positioning” refers to determining which available products best serve specific niches within the larger national market.
Literature Review and Critical Debate
Segmentation: Markets are said to be “segmented” if they are divided into subsets based on different types of consumers or the goods they favor. As a result, the Segmentation approach is employed to zero down on a certain market configuration. The structure of the market has several different types of segmentation. Geographical, demographic, psychographic, and behavioral classifications apply to different market segmentation types (Goyat, 2011). Analysts are split on whether segmentation is an adaptive approach; some see it as flexible, while others are skeptical. Market segmentation is breaking the total market into smaller submarkets, each of which can be better served by a tailored set of marketing mix methods employed by individual companies. Market segmentation, on the other hand, is a useful tool for improving an industry’s competitiveness and core capabilities relative to other markets.
Some local experts contend that the phrase “market segmentation” can be explained as the fragmentation of the entire market. Still, they offer no guidance as to which parts of the market should be the focus of a segmentation strategy to maximize a company’s competitive advantage. For instance, Starbucks’ target demographic consists primarily of millennials (those aged 25 to 40). Therefore, it is safe to assume that the majority of customers at Starbucks are members of the millennial generation (Talpau and Boscor, 2011). Starbucks can tailor its marketing to specific demographics by looking at how old its customers are.
Targeting: Finding the ideal customer to sell a product’s wares to is challenging for any business. The company’s target market must be understood on a high level. To achieve the desired result, it is necessary to employ the most effective marketing methods for the customers identified as targets (Aaker and McLoughlin, 2010). As an illustration, Walmart mostly serves middle-class consumers. That is because the organization offers competitive pricing in the local market. Since the company’s target demographics are not particularly well off, they do not cater to the needs of the wealthy.
On the contrary, Starbucks seeks out members of the millennial generation who have a propensity for cutting-edge goods. As a result, the organization can focus on providing excellent service to a select number of customers. Because of this, corporations can get an edge over their rivals in the market.
Positioning: A product’s “Market Positioning” is its current placement within the market (Keller, Parameswaran, and Jacob, 2011). On the other hand, market positioning is not just about fitting products into the right niches but also about adapting to how businesses and their industries are changing. The corporation must emphasize the industry’s dynamic nature and position its products accordingly because of the ever-changing nature of the external environment. It is safe to say that if the company does not adjust to the new realities of the marketplace, it will not last very long. Zara, for instance, has positioned itself in the market so that consumers may buy their products at reasonable prices (Martin Roll, 2018). Since women make up the majority of consumers in this country, it makes sense for the corporation to focus on selling to them.
Application of STP in the Industry
According to Dibb (2010), enterprises in the industry utilize tactics known as “Segmentation, Targeting, and Positioning” to find new customers in the country. Companies in the business employ these techniques to their advantage to carry out various marketing communications and then present their products to the market—successful STP implementation tactics used by major corporations, including Nike, Walmart, ZARA, and Starbucks.
Nike
Nike was created in 1964 by two college buddies, Bill Bowerman and Phil Knight (Nike, 2019). Nike, with headquarters in the United States, is a multinational corporation and the world’s largest distributor of athletic footwear. Although it all began with a pair of shoes designed for the 1960 Summer Olympics, the company has since expanded into producing and selling various sports equipment.
Segmentation: The strategy relies on psychographic segmentation characteristics, which Nike uses to make its product more appealing to its core demographic. Customers for this business typically have some connection to the world of sports. Nike employs a unique tactic to limit the growth of each market area. Also, Nike uses age, generation, occupation, and gender to target consumers (Mahdi et al.,2015). The company’s primary demographic comprises those between the ages of 15 and 40. Due to its strategic segmentation, the company can target a specific demographic with products that might otherwise go unnoticed.
Targeting: The athlete appears to be Nike’s primary market, and the company is eager to supply them with footwear and other apparel necessities. Nike employs aggressive marketing methods to raise brand awareness within its target demographic. In addition, Nike offers shoes with the athlete’s name on the heel, or “signature” sneakers, which attracts a sizable consumer base (Brohi, 2016). The company’s marketing plan also calls for celebrity and sports team endorsements. Since its inception in 1989, the company has used a second technique to attract customers: providing them with the opportunity to train in various sports.
Positioning: Nike aims to capture a sizable portion of the sportswear market by producing a product directly tied to sports (Brohi, 2016). To quote Nike’s positioning statement: “For every athlete, Nike supplies the perfect product that instills confidence in their athletic endeavors.”
Zara
The Inditex group’s flagship brand is the Spanish clothing company Zara. The company sells Spanish clothing and accessory brands in its retail locations (Inditex, 2019). Amancio Ortega Gaona established Zara in 1975, primarily focused on offering high-quality goods like apparel and accessories.
Segmentation: Strategic segmentation is crucial for Zara because it aids in the analysis of the company’s target market. Using these ideas, Zara implements demographic segmentation throughout the company. The business’s typical target customer is between 18 and 40, with a medium-range income. The method employed by Zara is to sell clothing in line with the newest trends to draw in their target market at high prices (Aftab et al., 2018). The business also appears to use psychographic segmentation in its operations because they focus on the customer’s hectic lifestyle, enabling them to sell the goods quickly. Zara employs this strategy to capitalize on the busy customer’s business activity.
Targeting: A company’s customers are usually the first focus when developing a strategy to target a specific demographic. All of Zara’s efforts are geared toward finding new customers. Rather than spend millions on advertising, Zara prioritizes strategic store positioning. With a focus on mobilizing many people, its outlets are strategically located in the busiest parts of major cities (Kaisar, 2016). Another one of Zara’s goals is long-term customer loyalty. As a result, the company has a great customer service department, which aids in gathering feedback from customers. As a result, the consumer is more likely to make additional purchases and stick with the business over the long term.
Positioning: When it comes to the company’s positioning strategy, Zara’s primary goal is to “democratize fashion” (Aftab et al., 2018). The company offers one-of-a-kind products to the consumers it focuses on, in smaller numbers and with various designs. The corporation relies on market orientation when positioning its brand in the market.
Walmart
It is common knowledge that Walmart is one of the greatest retail companies in the world in terms of the income they generate. Customers worldwide can purchase the wares from the company at the most competitive price (Walmart, 2019). Sam Walton established the world’s most successful retailing corporation in 1962, the same year that the first Walmart Store opened for business in the region of Arkansas.
Segmentation: Walmart’s segment strategy aids the company in keeping up with the ever-evolving demands of its many different types of customers. Walmart employs a consumer segmentation approach called “mono-segment,” which categorizes buyers according to a single criterion. Products are marketed to target markets based on demographic information such as location, population density, gender, age, occupation, disposable income, brand loyalty, and consumer preference. Customers’ channel preferences influence their selection, affecting the matrix mentioned (Alberts and Abinader, 2018). Walmart employs the Demographic and Psychographic segments better to understand its customers and their preferences, all while maintaining its low-price strategy.
Targeting: Walmart’s strategy is to appeal to many people worldwide; hence it uses a broad and uniform approach to marketing. The corporation claims that they view everyone as a potential consumer; hence they do not employ the differentiation strategy to gain the upper hand in the market. The pricing at which the company’s wares are offered play a pivotal role in setting the company apart from its rivals. Because of this, Walmart has a targeted strategy based on offering cheap goods to a big consumer base (Spicer and Hyatt, 2017). So, Walmart can accurately gauge its customer base by decreasing prices and stocking products according to demand.
Positioning: Over the years, Walmart’s positioning strategy has been a major factor in the company’s success. Walmart’s positioning strategy is to set itself apart from the competition by making its products and services stand out in the market (Roll, 2015). The company’s strategy, which is distinct from the Position strategy, is to differentiate itself from rivals by emphasizing its distinctive products. Target customers are first exposed to Walmart’s unique value proposition when the company explains the differences between its many brands and product lines. As a result, Walmart employs a positioning strategy to set its brand apart from competitors.
Starbucks
Starbucks is a global coffee company known for its high-quality products and unique brand experience. Starbucks’ segmentation, targeting, and positioning strategies include several future-looking marketing methods to meet the needs of the company’s prospective customers in the market. Therefore, Starbucks’ goal is to Help the company in developing its market structure and creating a distinctive experience for its customers worldwide through its STP approach (Starbucks, 2018).
Segmentation: Starbucks has traditionally focused on a narrow segment of high-income, educated consumers willing to pay a premium for a premium coffee experience. Starbucks’ segmentation approach considers the socioeconomic nature of the countries it operates, with its primary customers being professionals and upper-middle-class families (Forbes, 2016). Most of the company’s customers are corporate professionals who like to unwind with a cup of high-quality coffee after a long day at the office or during a meeting. Therefore, it is safe to assume that Starbucks’ goal in the country is to provide premium coffee to wealthy individuals. However, Starbucks is typically geographically segmented and focuses on areas with a high concentration of consumers in the higher socioeconomic brackets (Forbes, 2016). However, the company’s management always keeps in mind the behavioral characteristics of their customers, and the corporation aims to offer its products to society’s coffee lovers.
Targeting: Starbucks has typically targeted urban areas with high foot traffic and a high concentration of its target customers. The company has also expanded into new markets, such as China and India, to reach new customers and capitalize on growing coffee demand in those regions (Peterson, 2015). Once the segmentation is complete, Starbucks will focus on attracting those most likely to become paying customers. The company’s primary objective is to establish lasting relationships with elite consumers to solidify its position as one of the world’s leading providers of premium coffee (Forbes, 2016). Product diversification and introducing a new mil product are two business techniques that have helped grow demand among coffee connoisseurs.
Positioning: Starbucks is a premium coffee brand that offers a unique and upscale experience. The company’s stores are designed to be comfortable and inviting, and its marketing efforts emphasize its coffee blends’ high quality and unique flavors (Wong, 2011). When it comes to coffee sales in the country, Starbucks has carved out a niche for itself. The best coffee experience is essential to the company’s efforts to preserve its name and brand (Wong, 2011). The company’s logo distinguishes it from its competitors. Because of this, the organization can obtain an edge over its competitors.
Recommendations
Nike is a multinational corporation that designs, manufactures, and distributes a wide range of athletic footwear and leather goods. The company’s marketing strategies in the market have a few flaws. Nike has issues with product and shoe prices. As a result, to increase sales, Nike should lower the price of its products in the market. They need to release a wide variety of products that any consumer can easily obtain, regardless of their interest in sports. It is expected that the implementation of these recommendations will lead to a rise in domestic revenue for the organization.
Zara is among the businesses that value its customers’ time spent with the brand. Taking care of consumers is the company’s top priority, even more so than increasing product sales. Customers should feel at ease in all of the country’s Zara outlets. It is not enough for Zara to employ methods for collecting customers’ feedback; the company also needs to experiment with various forms of advertising to increase its market share.
Retail giant Walmart is well-known for its extensive selection of fashionable clothing and accessories. The company’s low-priced goods are its key source of competitive advantage. The company’s products are typically priced such that they are within reach of a wide range of consumers. The scarcity of physical locations hampers the company’s lack of widespread availability. Therefore, in many places, the vast majority of the population lacks access to the company’s wares. The distribution plan is essential for Walmart to improve the company’s efficiency. To increase its growth rate, Walmart can look to its distribution strategy.
The coffee at Starbucks is among the best in the world. That is good for business since it means more people in the country will become consumers. The brand has amassed a large, dedicated following that spans all demographics, from working professionals to parents with young children. The company’s primary recommendation is to cater to customers’ wide-ranging needs and demands in many different regions. Starbucks must consider the wide variety of people in this country and across the globe to serve all its customers. Consumers should be able to indulge their individual preferences. The global demand for Starbucks’ products will rise due to this strategy.
Conclusion
This research analyzes a wide range of problems international businesses encounter—the widespread adoption of segmentation, targeting, and positioning (STP) strategies in modern business. The research delves deeply into segmentation, targeting, and positioning marketing disciplines to offer a holistic market view. The author of this report also aimed to help businesses grow by using STP technologies to increase their marketing efforts. Nike, Zara, Walmart, and Starbucks are the corporations chosen for this research. The primary issues with these businesses and how they apply STP technologies in their operations. Finally, recommendations are provided to help mitigate the negative effects of segmentation, targeting, and positioning on the company’s performance in the market.
References
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