Marketing Management: Stp Model For Assessment Answer

Answer:

Introduction:

This essay is designed to develop understanding about the different aspects of marketing such as segmentation, targeting and positioning. These aspects are interrelated and play a crucial role in designing marketing mix of the organization. In marketing, these aspects are also known as STP model for strategic planning. In success of IKEA Furniture Company and Johnson & Johnson pharmaceutical company, the STP strategic model has played an important role. By the help of this model, these companies expanded their business and attained success in the market. The STP model helped these companies to achieve their strategic business goals and objectives.


In the present era, segmentation, targeting and positioning are very important aspects of marketing. These aspects are also known as STP model or strategic approach in marketing mix. This model helps marketer in designing marketing communication plan for the business (Donald and Dunbar, 2012).  The different concepts of STP model are discussed as below:

The term ‘segmentation’ in marketing refers to a process of dividing a large homogenous market in smaller market segments on basis of different characteristics such as geographic territories, customer wants, needs, income level and demand. This process starts with identification of the bases for segmenting the market and provides market profiles for a particular business (Weinstein, 2013). Through market segmentation, companies may serve customers effectively and efficiently with unique product and services in its target market.

Targeting is a marketing strategy, through which a marketer assortments the potential customers to sell its product and services (Lamb et al, 2011). In targeting strategy, certain demographic groups are identified by the marketer, which include age, gender, income, geographic area, household size and various ethnic groups. Under targeting, companies focus on identification of most suitable market segment for their business. There are different bases, which can be used by companies for selection of best market segment such as size and potential growth scope. PEST analysis model can be used to identify different opportunities and threats associated with particular market segment.

In marketing, the positioning concept is a strategy, through which the marketer occupies a clear and unique position of its products in consumer’s mind (Moran and Hunt, 2014). It is helpful in creating a brand and service identity in the target market. In positioning strategy, a marketer uses different promotional activities to develop a position in the market and develops a marketing mix for each segment of market.

Johnson & Johnson is a leading pharmaceutical company of world. This company manufactures almost every product, which is required for a baby. The different aspects of STP model are used by this company, the detail of which is as below:


Segmentation: Johnson & Johnson Company is a well known brand in human care products. It divides its business in to main three segments such as pharmaceuticals, medical devices and consumer products. It operates its business in more than 60 countries and sales products in 200 countries. In pharmaceutical segments, the company is dedicated to solve and address important needs of medical firms including immunology, oncology, infectious diseases, neuroscience, cardiovascular, hepatitis and metabolic diseases. Johnson & Johnson is also dedicated to its customers to develop sustainable and integrated healthcare solutions for humanity, which is based on trust and transparency (Kampamba, 2015).

In medical device segment, this company produces a range of devices, which are usable by healthcare practitioners in field of neurological diseases, diabetes care, cardiovascular disease, orthopedics, infection prevention and aesthetics. Moreover, the consumer segment of Johnson & Johnson contains a big range of products that are used in skin care, baby care, oral care and women’s health care as well as different pharmaceutical products (Kim et al., 2015). These consumer segment products are sold through retail outlets across the world.

Targeting: In general targeting refers to selection of the target customers for particular goods or services. The target customers of Johnson & Johnson Company are range of customer groups belonging to different age, gender and ethnic groups. There are some issues for Johnson & Johnson like competitors or substitutes products but, the trust of people on this brand makes it easy to achieve targets in the market. Johnson & Johnson targets hospitals, doctors, wholesalers, healthcare professionals and retailers through its medical and healthcare product range (Johnson and Johnson, 2016). Under targeting, Johnson and Johnson can choose appropriate market segment for its products according to nature/characteristics of market and product nature. For example, a geographical region or country with large strengths of baby births and population of babies can be appropriate market segment for baby product segment of the company.

Positioning: Under positioning, a company tries to identify ways or strategies for positioning its products and services in the market. Under positioning, a company offers something extra, better and more valuable than rest of market players before customers in a target market. Johnson & Johnson tries to influence consumer’s mind is excellent way through quality of products. This company focuses to bring value for the people by new and innovative products (Leucht et al, 2012). The company is operating more than 134 manufacturing facilities with eight innovative research centers to secure its business position in the market. Strategic planning of Johnson & Johnson is excellent that meets all the expectations of human care and makes a strong position in the market.


IKEA uses three types of segmentation strategies for its business such as demographic, geographic and psychographic segmentation. Through use of demographic segmentation, company studies feasibility of a particular market through review demographic factors such as population size, life style of people, urban and sub-urban distribution of population, income level and age group. Under geographic segmentation, the company divides its whole market into geographic regions such as European market, Asian markets etc. IKEA is an international brand in furniture industry (Johnson and Johnson, 2016). This company is expanding its business in different countries through different marketing strategies. In this context market segmentation, targeting and positioning also used by the company as strategic tools. IKEA used market segmentation strategy by dividing the market in different submarket to provide its services effectively and efficiently. IKEA classified its customers as middle class, young and upward who prefer low price products (Sequeira, 2016). Therefore, the company described its market on the basis of different aspects such as; demographic, geographic, psychographic and gender.

Moreover, the income level and average age is expected to rise in developed countries but the target segmentation of IKEA is young and low to middle income families which are expected to small in size. For this reason, the targeting strategy of IKEA is mainly focused on middle income families. IKEA designs its marketing efforts according to this customer segment. The product range offered by IKEA is not limited to households. It means, the target customers of IKEA cannot be said to be households or families only (IKEA, 2016). The company deals in furniture for home as well as offices. For this reason, the business entities like property developers, real estate firms can also be target customers (i.e. business customers) for IKEA. In this context, it would be very productive for IKEA to target every target customer including households, offices and real-estate, property developers (Barton, 2015). This would be effective to improve effectiveness of marketing efforts of company. In this context, IKEA can offer different offers for households and business customers.

Overall, the market positioning statement of IKEA is “Your partner in better living. We do our part, you do yours. Together we save money.” IKEA focuses on creation of its position in the market through the use of effective marketing mix aspects such as high quality products, price, place and promotional offers. Marketing team of company collects different data about customer’s perception to develop and secure the position of company in target market. For this, the company is increasing investment in advertisements, sales locations and psychology of low pricing in market (Brown et al., 2012). Through low price and high quality of products, the company has achieved a good position in furniture industry.


Furthermore, IKEA provides the furniture to its customers at lowest price with better quality to make a good brand position in target market. One best way that can be taken into account by management of IKEA for improving its value position is the identification of wants and expectations of particular market segment or target customers (Barton, 2015). After this, it is duty of management to find out ways and value propositions, in which it can meet the requirements of target market in better way as compared to other market players. This can prove to be effective for attainment of competitive business position in market.

From the above analysis, it can be concluded that market segmentation, targeting and positioning are critical business practices that are needed by every organization for accomplishment of future business goals timely and successfully. This essay has also concluded that the consumers expect products with high quality at low and competitive market price. So, the companies need to focus on cost controlling techniques to ensure availability of products at low market price without compromising with quality aspects.

References

Barton, L. (2015). ‘Active Positioning: The Importance of Relevancy’, Journal of Marketing Perspectives Volume I, 48-58.

Brown, S., McDonagh, P. and Shultz, C. (2012). ‘Dark marketing: ghost in the machine or skeleton in the cupboard’, European Business Review, 24(3), 196-215.

Donald, M. and Dunbar, L. (2012). Market Segmentation: How to Do It and How to Profit from I. USA: John Wiley & Sons.

Ikea(2016)Home Office Furniture: Who says you can’t mix business with pleasure?. [Online]. Available at: https://www.ikea.com/gb/en/catalog/categories/departments/workspaces/ (Accessed: 25 August 2016).

Johnson and Johnson (2016) Johnson and Johnson. [Online]. Available at: https://www.jnjindia.com/ (Accessed: 25 August 2016).

Kampamba, J. (2015). ‘An Analysis of the Potential Target Market through the Application of the STP Principle/Model’, Mediterranean Journal of Social Sciences, 6(4), 324-356.

Kim, M., Cardinal, B. J. and Cardinal, M. K. (2015). ‘Diversifying Physical Activity Course Curricula to Meet Institutional Expectations and Satisfy Student Needs in Higher Education: An Introductory Framework’, Journal of Physical Education, Recreation & Dance, 86(9), 5-8.

Lamd, C., Hair, J. and Mcdaniel, C. (2011). Essentials of Marketing. USA: Cengage Learning.

Leucht, S., Tardy, M., Komossa, K., Heres, S., Kissling, W., Salanti, G. and Davis, J. M. (2012). ‘Antipsychotic drugs versus placebo for relapse prevention in schizophrenia: a systematic review and meta-analysis’, The Lancet, 379(9831), 2063-2071.

Moran, M. and Hunt, B. (2014). Search Engine Marketing, Inc.: Driving Search Traffic to Your Company's Website. USA: IBM Press.

Sequeira, M. (2016). ‘Marketing case study’ How to build strong brands in emerging countries, 3(5), 23-36.

Weinstein, A. (2013). Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. USA: Routledge.

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