Marketing-in-a-Box

STP FrameworkTargeting the Right User

Copyright: Patrick "Mad" Mork 1

Contents

What is STP and why do marketers need it?

Who owns it?

When should you use it?

How does it work?

Examples

Appendix:

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20 years experience in strategy, marketing and sales

Large company / start-up experience

Multi-cultural working experience across 4 continents / languages

Expertise: Digital Content / Apps, Mobile Games, Consumer Goods, Mobile Advertising

About Mad Mork

What is STP?

Segmenting, Targeting, Positioning (STP) is a framework designed to help marketers better understand

their market; identify segments with unmet needs in this market and position their product & services to

address these needs

4Copyright: Patrick "Mad" Mork

Why is STP important?

As markets grow they create opportunities for monetization

This in turn attracts new players who spend marketing dollars to capture users

These new players push new products / features which generate greater marketing noise among users

Which forces marketers to identify segments with unmet needs which they can target with more relevant messaging

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Market Growth

Attracts competition

Which increases marketing

spend

That generates more noise

Segmentation becomes needed

Copyright: Patrick "Mad" Mork

Who owns the framework?

The marketing / head of marketing typically owns the overall strategy for the STP framework and has final say on target audience and messaging

In smaller organizations this might be owned by the CEO / Founder if no marketing resources exist

Input sources come from:Senior leadership to ensure STP is aligned with the overall company strategySales / customer support to make sure STP is aligned with market realities and customer use casesProduct / engineering who should agree and also will need to build a product that is inline with the messaging needed to effectively reach the user6

Marketing- head and product

marketing manager

Sales – customer / user input

Senior mgmt – overall company strategy

Product / Eng –product roadmap, features, direction

Copyright: Patrick "Mad" Mork

When should you use it?

STP should ideally determine what kind of product you’re going to build

STP reveals which group of users in your desired market have unmet needs which you could capture

STP helps you formulate which message this group of users is most open / receptive to

The above then guides what kind of product you will need to fulfill that message / brand promise

In some cases the product / technology has already been developed to solve a problem but the target has not been specified

In this case STP takes place after product development but before any marketing spend takes place

STP may result in a different target being focused on based on the characteristics of the product / service

Future changes to the product roadmap must take into account the agreed STP moving forward so that changes are based on the agreed target audience and positioning

Before product launch

After product launch

7Copyright: Patrick "Mad" Mork

Requirements and output

Segmentation Targeting Positioning

Requirements

1. Market data – size, demographics, growth, trends

2. User data – frequency of use, types of use, levels of engagement, propensity to spend

Output

3. Segmentation matrix4. Segmentation

criteria

Requirements

1. Clear, agreed market segments

2. Agreed criteria for choosing desired target market

3. Organizational buy-in (snr. Mgmt, product, sales)

Output

4. Agreed target audience and target user profile

Requirements

1. Locked down target audience

2. Organization buy-in on actual message

Output

3. Brand key / Brand Pyramid

4. Brand Statement / Brand Idea

3. Brand Book / Bible8Copyright: Patrick "Mad" Mork

Segmentation - Goals / output

1

2

3

Establish the criteria under which you segment the market (age, race, income, time, location…)Segment the market into different groupsUnderstand the size, value, growth, dynamics of each market segmentDetermine what is important to each market segmentDetermine segments your competitors are addressing / identify where they are weakUnderstand what segment(s) you are addressing directly or indirectly

Determine if another segment has unmet needs that you can either target with an existing product or with a new oneAssess whether you have the adequate resources (product, human, capital) to address the various segments available

9Copyright: Patrick "Mad" Mork

Implementing STP - Segmenting

The first step is understanding who your users are and why they use your product

To this end you want to:1. Do Quantitative research to understand your user base and how they see your product2. Do Qualitative research (focus groups) to drill down and ask users more specifics around your findings in #1

The Goal of your research is:1. Understand how user behavior towards your product changes based on demographic factors (age, race, sex, income, location)2. Understand if there are areas where your consumers feel underserved by competitors and which demographic is most underserved

10Copyright: Patrick "Mad" Mork

Segmentation – Quantitative Research

Questions types:1. Filtering – filter out users

who aren’t meaningful to you

2. Satisfaction – how satisfied are users with your product? With competitors?

3. Reason for being – how do users “feel” about your product?

4. Functionality – why do users use your product?

5. Features – which features do they use and why?

6. Awareness – how did they hear about you? From whom?

Things to keep in mind:1. Keep questions neutral;

avoid leading2. Avoid open ended questions

that can’t be measured3. Rotate the order of the

answers to avoid bias4. Provide multiple answers

and, when appropriate, the option to check multiple answers

5. Ensure you have a large enough sample size to be representative (N=?)

6. Keep your survey short (15-20 questions)

11Copyright: Patrick "Mad" Mork

Research providers

Multiple online solutions exist:Ask Your Target MarketSurvey MonkeyUserlytics

Turn around can be 3-5 days typically

Cost is done on a cost per contact basis typically

Providers can reach out either using your own target list or their own

Providers tabulate and provide dashboards for results

12Copyright: Patrick "Mad" Mork

Segmentation – Criteria definition

With the research done you should break your users into groups / cohorts

Could be by demo: age, race, sex, income, time of use, location, etc.Could also be by personas

Example - Adventurous travelers: Male typically 24-35, middle / upper middle class, loves technology and gadgets, highly social and enjoys traveling to exotic destinations

Analyze how responses differ from one group to another and key reasons for using your product or that of competitors

13Copyright: Patrick "Mad" Mork

Segmentation Output example – mobile racing games users’ based on graphics and gameplay

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Ultra-realistic

Cartoony

Traditional racing

Fantasy racing

Graphics Style

Gameplay Style

Target Segment

Opportunity?

Segmentation – Key questions to ask

1. What criteria am I using to segment my market? (Age, Race, Sex, Household Income, Location, Lifestyle …)

2. Are these the right criteria? 3. Are there other criteria which could become relevant to users?4. How likely are these criteria to change over time?5. Do these criteria result in groups that are readily identifiable,

targetable and monetizable?6. Is this group actually meaningful enough for me to solicit data

from them / perform research?7. Can I actually make money from any of these segments?

15Copyright: Patrick "Mad" Mork

Targeting- Goals / output of

1

2

3

Identify a segment of the market that is underservedAssess whether you have the right product and resources to properly address that market

Pick a target that is easily identifiable and who will likely consider your product if messaged properlyChose an audience to whom you can craft a message that you can “own”

Ensure the target group is large enough to be commercially viable both today and in the immediate futureSelect a target audience that will be more challenging for competitors to target

16Copyright: Patrick "Mad" Mork

How to find out what your target audience wants

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Use social channels to monitor user feedback

Monitor customer reviews on retail e-commerce sites

Engage press to get 3rd party professional feedback / reviews

Engage users directly on social media asking for feedback / suggestions

Email surveys directly to existing users using tools like Survey Monkey or SurveyGizmo

Target beyond your user base (or if you have no current users) using tools like Ask My Target Market

Make sure you target a broad enough base of users to ensure statistical significance

Keep questions broad and avoid “leading” users to the answers you might like

After quant research, perform focus groups with 6-12 people per group

Groups should be moderated by an independent 3rd party agency

Groups should be representative of the target audience demographic

Multiple groups should be run over multiple days

Ideally, groups should be run in different regions of the US to compare differences

Social Channels / Reviews

Direct research (Quantitative)

3rd Party Research(Qualitative)

Copyright: Patrick "Mad" Mork

As markets mature, your target market will likely evolve

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Broad-based, generic

Demographic (age, race, sex)

Needs based

Aspirational

Market maturityOver time

Segments Targeted OverTime

Copyright: Patrick "Mad" Mork

Targeting output example – mobile racing games target group

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Ultra-realistic

Cartoony

Traditional racing

Fantasy racing

Graphics Style

Gameplay Style

Target Segment

Women who want traditional gameplay with good

but not ultra

realistic visuals

Targeting– Key questions to ask

1. How attractive is my target category, is it growing?

2. How mature is the market? How developed is it?3. How well can I address this target?4. Am I in the right target category?5. How competitive / crowded is the target

category?6. How well do my competitors compete in their

target categories?7. Do these target categories really reflect what

consumers want? 20Copyright: Patrick "Mad" Mork

Positioning – what is it?

Definition:

The way in which marketers

attempt to create a distinct

impression in consumers’ mind

What it must answer:

Frame of Reference (FOR) - What is your product / service?

Point of Difference (POD) How is it different from competitors?

Reason to Believe (RTB) Why should consumers care?

21Copyright: Patrick "Mad" Mork

Your Brand Idea is the essence of your brand and helps define your positioning

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The essence of your brand is what drives your positioningBrand

Idea

Manifestation of brand in human characteristics

Brand / Product Persona

How does it make users feel?

Emotional benefits

Tangible benefits to the user

Functional benefits

Most distinguishable product attributes / features

Features & Attributes

Copyright: Patrick "Mad" Mork

Apple – Brand pyramid example

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Think DifferentBrand Idea

(none)Brand / Product Persona

I’m a rebel and an artist. I’m not a geek

Emotional benefits

Attractive, elegant, fast, easy to use

Functional benefits

Sleek design, powerful processors, advanced operating system

Features & Attributes

Source: Casual Executive Summit 2012

Copyright: Patrick "Mad" Mork

6 Keys to a strong positioning statement

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Simple, memorable and designed for specific target audience

Clear, unmistakable picture of your product which is unique

Credible; you can deliver on this promise to users

Ownable – you can own it and be uniquely positioned

Acts as a guidepost on current / future marketing decisions

Open and leaves room for future growth

Source: Doug Stayman, Associate Dean MBA program, Cornell University GSB

Pepsi Max – Targeting and Positioning example

Soft DrinksUsers

Diet Soft DrinksUsers

Pepsi MaxUsers

Want something refreshingTarget: M/F 15-44 years oldPositioning: Quenches Thirst fast

Users want something with less caloriesTarget: M/F 24-44 mostly femalePositioning: Same great taste, less caloriesMale SD users feel “diet” is for women. Dislike weight conscious imageTarget: Male 34-54, sports, health consciousPositioning: 100% Taste, 0% Sugar. Aggressive, cool, extreme sports

25Copyright: Patrick "Mad" Mork

Summary

STP is a framework designed to ensure the right message hits the right audience

Proper use of STP is key in hyper competitive markets with excessive “noise”

Segmenting involves breaking the market down into identifiable groups / cohorts

Targeting involves choosing an underserved market segment that can be captured by relevant messaging

Positioning involves developing messaging that is unique, defendable and relevant to the target audience

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APPENDIXSTP Framework – Reaching the Right User

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References & sites

BooksPositioning: The Battle for your MindThe 22 immutable laws of BrandingBrand against the machine

SitesDefinition – WikipediaThe Art of Brand PositioningCornell’s guide to writing Positioning Statements

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