The STP Plan - Segmentation, Targeting & Positioning

Here is our elaboration on the STP decisions for Costo.

Segmentation:

We used the following bases for segmentation:

1) Geographic

• urban consumers
• people living, working or spending a lot of time in downtown area of New York

2) Demographic variables

• men and women in their 20s to 40s
• mid to high income level

3) Behavior-based

• Trend-setters: attend various events, are active in the trend-making scene
• Followers: follow different kinds of trends
• Have high loyalty to brands that are meaningful to them

4) Values and lifestyles

• Great value/appreciation for sustainability issues
• Value on distinct style and design; desire for something that is rare or uncommon
• Fashion conscious; style plays a big part in their lives

Targeting:

Our target audience is middle to high class consumers who have a distinct style and awareness for environmental issues.

We need to create brand awareness for Costo, and considering the low resources for the launch, we plan to do so by targeting a smaller set of consumers first.

Our primary consumer is the trend-setter. He/she is fashion savvy and active in the scene, visiting exhibitions and shows, etc.  These people popularize a new fashion, they make the trend. For example: http://www.timeout.com/newyork/shopping/32-local-trendsetters

Our secondary consumer is the follower. He/she has distinct style and follows trends set by the primary consumer group. This consumer segment represents the majority of our target audience, with regards to market share size and sales.

Positioning: 

Based on our competitor analysis, we find that Costo can serve a niche of consumers who appreciate design and sustainability aspects. Since our target audience is very careful on what they wear, and we have a strong brand promise, we can position the brand in the more premium segment. However, we do not compete with individual tailor-made products, and the price is lower than the premium paid for that craftsmanship.

Functional benefits: protecting function of the hat, a finishing touch to the looks

Emotional benefits: a very distinct design brings a feeling of being different and unique, makes you stand out from the crowd, “feel-good” factor from promoting sustainability and acting responsibly,

Self-expressive benefits: a feeling of being cool and distinct by wearing the special type design hat, being stylish and a bit carefree at the same time by wearing a colorful bobble

References:

Kotler, P., 1999. Kotler on marketing: how to create, win, and dominate markets. [e-book]. Free Press. Available at: Google books <http://books.google.fi/books?id=5GigjssNBBwC&pg=PT41&lpg=PT41&dq=kotler+stp&source=bl&ots=oJ0qvuCQ41&sig=N__A8bCvDlb-4IIX38l5OyuQSqg&hl=fi&sa=X&ei=HT2eUq_4KIHStAaY1ICoCA&ved=0CE8Q6AEwAw#v=onepage&q&f=false> [Accessed December 2, 2013].