Perceptual maps are an excellent tool for visualizing both gaps in the
offerings for a target market and the firm's relative position.
repositioning involves moving the firm or its offering to the
center of the target segment, using marketing activities such as the 4Ps.
Firms should account for both the benefits (i.e., moving closer to
customers' ideal points) and costs (i.e., resources spent to move) of
a positioning statement for each target segment encapsulates the
essence of the segmenting, targeting, and positioning process, by
addressing who customers are, what needs the offering satisfies (
purchase attributes), and why this offering or firm is best at satisfying the
Building Customer Centricity: Building a customer centric organization is different
from executing an STP process, in that it requires a top down, enduring
commitment from senior leaders to institute a customer centric philosophy
across the firm's entire organization.
Jeff Bezos's 2013 letter to Amazon's shareholders captures the essence of
a customer-centric organization, as well as some of its benefits. As
described in this letter, a
customer-centric approach makes a firm
"internally driven" to satisfy target customers,
synergistic with the STP
approach that "externally focuses" the firm on the right customers (i.e.,
target customer segment). Together,
these two approaches allow firms to
manage customer heterogeneity by disaggregating customers into
homogenous groups, then narrowly focusing and motivating the total
organization to address the needs of these select customer segments. The
goal is to
focus the vision of the firm on the specific needs of customers
(rather than products). Improvements in the firm's products and services
over time then result from listening to the voice of the customer. Many
firms pay consultants massive sums to conduct STP analyses—and then
put the beautifully designed slides on a shelf in the market manager's
office, with little effect on day-to-day decisions. The STP process aims the
marketing "gun," but authentic customer centricity helps the firm pull the
"trigger" in its everyday decisions. As Amazon's famous CEO explains, the
firm's "investments are motivated by customer focus rather than by
reaction to competition."
To convert the inputs into outputs, marketers conduct a series of process steps. We
describe each step-in detail here, but various
tradeoffs and analysis options make the
process less straightforward than it might appear.
A trade off that occurs at each step is
the need to balance precision with simplicity. For example, virtually every customer
segment can be divided further into more subsegments, but at some point, doing so
makes the overall STP analysis very complex to understand and communicate, such
that it hinders the firm's ability to develop feasible, executable marketing strategies. An
initial STP analysis therefore should lean toward simplicity. Once the strategy is
operating smoothly, a marketer can go back and refine it iteratively.
some steps in the STP and customer centric processes for managing
can be skipped, depending on the firm's specific situation.
process also can be applied at multiple levels (firm, geography, product), throughout
the organization. In this section, we outline the process for a firm competing in a single
product category; larger organizations can duplicate this process for multiple business