Marketing 102: SWOT + STP + 4Ps

In Volume 2 Issue 42 we discussed Marketing 101 (SWOT plus STP).  Once you’ve conducted a thorough SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), the next steps involve:

·        Breaking the market into smaller, more homogeneous segments (segmentation; the “S” in STP)

·        Specifically targeting discrete market segments (targeting; the “T” in STP)

In consumer markets, customers are typically segmented according to criteria such as their product usage (heavy, medium, light, and non-users); demographics (e.g. Baby Boomers, Generation-X, and Generation-Y); or family lifecycle stage (e.g. not married, newly married, full nest, empty nest). 

You must examine your ability to deliver value to the targeted segments.  Do you have what it takes or will you need to develop new capabilities (distinct competencies) to position yourself properly in the competitive landscape?

One must also consider the fact that many markets are dynamic.  Customers’ tastes and preferences change over time, as do the different strategies implemented by competitors to meet these ever-changing customer needs and wants.  Bottom line: the processes associated with SWOT + STP are not static, but dynamic (e.g. a once-a-year review won’t be sufficient for most consumer markets).

Positioning

The “P” in STP involves developing a desired positioning in the minds of your target market (i.e. compared to your competitors).  Your positioning strategy will drive the design and implementation of a customized marketing program (the 4Ps) for each target market.  A properly designed marketing program will create a competitive advantage for your organization. 

One positioning strategy to consider is that of linking the product or service to a significant source of customer value (e.g. fast service).  This value can be psychological in nature, functional, and/or economic.  You may also choose to link your “brand” to a particular customer segment (e.g. the upper class).  Your goal in establishing a position is to establish a strong association between what you have to offer and your brand—in the mind of the customer—such that your brand provides more value than do competitive brands.  To develop this strong position, you must have a clear brand image, integrated marketing communications, and a well designed marketing plan (4Ps). 

The 4 Ps

·        Product – features that deliver customer benefits

·        Price – economic value for the money spent

·        Place – (distribution) – availability of your product to customers

·        Promotion – value of information to make an informed buying decision 

Using Daystar Consulting as an Example

·        Product – A service based on my education, training and experience; this service must provide value in helping my target market (Christian business owners) solve problems in a practical and biblical way.

·        Price – The price (either per billable hour or by project) must reflect the value provided as well as the price structure of the small business consulting industry.

·        Place – The use of the Internet makes some of Daystar’s value available to anyone, anywhere at anytime. 

·        Promotion – These Weekly Insights provide one means of supplying information about the benefits provided by Daystar Consulting, as do speaking engagements and involvement in the local business community. 

As I consider each of the 4Ps, I must take into consideration my target market and how I would like to position Daystar Consulting.  Drawing a perceptual map (on any two attributes of interest to my target market) may help me understand where I’d like to position Daystar.  For example:      

               High

                        B          Big 4 Firms

                        u

                        s.                                                                 Daystar

                        A      Secular Colleagues

                        c                                                 Christian Colleagues

                        u

                        m

                        e                                                                                Pastors

                        n            

Low                 Christian Worldview                          High 

Thus, my marketing program is driven by the position (high in business acumen and high in Christian worldview) that I would like to obtain within the minds of potential clients within my target market.  Where are you located on a perceptual map for your target market?  Where would you like to be located and why? 

Keith 

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