Segmentation, marketing, and positioning (STP) is an important concept and practice in marketing. A real life STP marketing case study example can help you understand what STP is and how it is applied by companies.
This article presents a segmentation targeting and positioning strategy example or STP example company. It also presents a segmenting targeting positioning example. It discusses market segmentation of cars and stp model marketing example, and is related to market segmentation for car industry, automotive market segments, automotive market segmentation, and marketing stp:
- Psychographic segmentation of automobile industry
- Geographic segmentation of automobile industry
- Demographic segmentation of automobile industry
- Behavioral segmentation of automobile industry
The article basically attempts to answer the question how do car companies segment their market (focusing on Volkswagen)? Here is the STP marketing example company essay preview:
Segmentation, Targeting and Positioning by Volkswagen
Introduction
Many successful companies across the world apply segmentation, targeting and positioning (STP) as part of their marketing strategies. Volkswagen (VW), a company that makes cars is one of the successful companies that apply STP. Established in 1937, the company manufactures several car brands including Volkswagen, Audi, Seat, Lamborghini, Skoda, Porshe, Scania, Man, Bentley, and Bugatti, (Volkswagen, 2018a; Bhasin, 2017; Volkswagen, 2018b). While its headquarters is in Wolfburg, Germany, the company has several branches and plants spread out in different parts of the world. This enables it understand and meet the needs of its global clientele in addition to affording it a robust distribution network. This paper briefly discusses segmentation and targeting before focusing on how Volkswagen has segmented its market, its target markets (segments), and how the brand is positioned.
Related Article: Market Segmentation, Targeting & Positioning (STP) Company Examples
Segmentation and Targeting
Market segmentation, according to William Stanton, is the process of dividing the heterogeneous market for a product into several sub-markets or segments, each of which tends to display homogeneity in all important aspects (Rudani, 2010; Tabavar n.d., p. 63). Philip Kotler, on the other hand, defines segmentation as the process of dividing a market into discrete groups of buyers based on factors such as needs or characteristics, behaviour, marketing mixes, or who might require different products (Rudani, 2010). A company’s market can be partitioned or divided based on different factors. Some of the bases commonly applied in segmenting a market are demographic characteristics (such as age, gender, religion, income levels, family size), behavioural characteristics (such as brand loyalty status, usage rates/consumption levels, benefits sought by the buyer, response to a product, and occupation), geographic characteristics (such as geographic location, cultural preferences, language, population type and density (urban, rural, exurban, suburban), time zone, and climate/season, and psychographic characteristics (such as values, beliefs, interests, attitudes, lifestyles, personality traits, social status).
Targeting, according to Bihani (2004), is the process of evaluating how attractive market segments are and choosing the segment(s) to enter. It involves making choices taking into consideration available and necessary resources. Firms have a number of options with regard to the targeting strategy to apply. The main targeting strategies that companies can apply are mass marketing, niche marketing, segmented marketing, and micromarketing (Strydom, 2005; Kotler et al., 2015).
Segmentation and Targeting by Volkswagen
Volkswagen applies segmented marketing and has its market partitioned based on a mix of psychographic, demographic, geographic, and behavioural factors to meet the specific needs of different groups of customers. The following section discusses Volkswagen’s market segmentation based on these factors.
Psychographic Segmentation and Targeting
Psychographic segmentation involves partitioning a market based on customers’ values, beliefs, interests, attitudes, lifestyles, personality traits, social status, or other psychographic factors (Camilleri, 2018). With regard to psychographic segmentation, Volkswagen has partitioned its market based on customers’ interests, values, social status, and lifestyles. In this regard some of the segments the company targets include consumers who simply need to move (or transport goods) from one place to another conveniently and affordably, sports enthusiasts, technical/engineering enthusiasts, and consumers who need luxury and comfort as will be discussed in the following paragraphs.
Vehicles such as the beetle, Polo, Golf, Jetta, Touran, and Volkswagen Amarok pick-up and are aimed at catering to the needs of consumers who simply need to move from one place to another (or transport goods) conveniently and without spending so much money; they simply wish to enjoy the utility value of a car (Schmid, 2013; Skema Business School, 2014). This customer segment include people who wish to use the car as a tool. Some customers in this segment may go for the compact cars such as the beetle, polo, and golf to conveniently move around while some customers may go for the Touran (family van) so that they can easily transport their families with relative comfort. ….
Positioning of Volkswagen/ Volkswagen Brand Positioning
Market positioning, according to Wilkinson (2013), is the process of establishing the identity or image of a product or brand so that it is perceived in a certain way by consumers. Positioning relates to how the consumer perceives the product or brand in relation to other products or brands. It involves placing a product in such a way that it occupies a clear, distinctive, and favourable place, relative to competing products, in the minds of consumers in the target market (Walletzký, 2015). With regard to positioning, Volkswagen takes pride in being a leader in German engineering (which focuses on design precision and feel), and to this extent has in the past used the tagline “The Power of German Engineering” (Sherman, 2017). The company has also used the slogan “If only everything in life was as reliable as a Volkswagen” to highlight the brand’s reliability (Nevick, 2013)…
Conclusion
Volkswagen segments its market based on a mix of psychographic, geographic, demographic and behavioural factors to meet the specific needs of different groups of customers. With respect to psychographic segmentation, the company has segmented its market based on customers’ interests, beliefs, values, social status, and lifestyles. Some of the segments the company targets in this regard include consumers who simply need mobility, sports enthusiasts, technical/engineering enthusiasts, consumers who prioritise comfort, and individuals with high social status. With regard to demographic segmentation, VW segments its market based income level and age…
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Related article: Market Segmentation, Targeting & Positioning (STP) with Company Examples
Outline
Introduction
Segmentation and Targeting
– Segmentation and Targeting by Volkswagen
– Psychographic Segmentation
– Demographic Segmentation
– Geographic Segmentation
– Behavioural Segmentation
– Positioning of Volkswagen
– Conclusion
– References
Ever increasing competition and greater demands by customers have rendered mass marketing virtually ineffective in several product categories (Harvard Business Review, 2006). As a consequence of the increasing competition and the rise of ever more demanding customers, producers are constantly seeking ways to differentiate their products and meet the specific needs of smaller customer groups. Today, it is a fact that coming up with a great product alone is not enough to achieve market success. Against this backdrop, companies need to apply strategic marketing. One of the strategic marketing tools that firms can use to their advantage towards achieving success in the market is segmentation, targeting and positioning (STP). Worth noting is that STP is as much a tool as it is a strategic approach and model used in marketing. STP is part of the process involved in coming up with a marketing strategy and summarises the market segmentation process. Hooley et al. (2012, p. 183) note that although positioning and segmentation are distinct parts of the [marketing] strategy, they are centrally linked by their focus on satisfying customers’ needs in a better way than competitors do. This paper discusses segmentation, targeting and positioning and illustrates the application of STP using different industry and company examples (with greater focus on car manufacturer, Volkswagen). The paper concludes with recommendations for companies with respect to the application of STP – market segmentation targeting and positioning examples.