Reference no: EM133316338

A part of the segmentation, targeting, and positioning (STP) process is to use a method or combination of methods to segment the market. This activity is important because this step develops descriptions of the different segments, which helps firms better understand the customer profiles in each segment. With this information, firms can distinguish customer similarities within a segment and dissimilarities across segments.

The goal of this activity is to demonstrate your understanding of the STP process used by P&G.

Read the case about how P&G applies the segmentation, targeting, and positioning (STP) process to its marketing strategy and then answer the questions that follow.

Look around your home and you are bound to see a product produced and sold by Procter & Gamble (P&G), under one of its brand names. The consumer goods giant maintains 65 brands in 10 categories-and spends more than $6 billion to advertise these products every year. For a company with something like 5 billion customers, a good segmenting, targeting, and positioning approach is essential to matching the right people with the right product.1 Therefore, it offers multiple brands within each product category to appeal to a wide range of customers and market strategically to specific segments. Let's consider some of the ways P&G segments its markets, targets its products, and positions itself by addressing demographic groups, different consumers' interests and ideals, and purchasing patterns.

Demographics

Gender For most of its history, P&G has offered products targeted to men or women. For example, its Gillette razor brand mainly provides shaving tools to help men get a clean shave on their faces, whereas the Venus razor brand targets women and promotes shaving tools for leg hair removal.2 It also sells a variety of sanitary products, most of which have featured conventionally feminine imagery (e.g., pink packaging, flowery scents). Yet segmenting consumers by binary gender categories excludes many potential customers.

In response to this growing recognition of the true character of its target market, P&G aims to appeal to consumers who identify as transgender or nonbinary. Rather than previous marketing efforts, which tended to highlight a very traditional, "tough guy" definition of masculinity, a recent Gillette campaign depicts the sweet story of a dad teaching his transgender son to shave.3 For its Always sanitary products, P&G has begun removing feminine signifiers, such as the Venus symbol, to ensure that nonbinary customers feel comfortable and acknowledged when they purchase the products as well.4

Other P&G brands seek to avoid gender categories at all. For example, an Olay advertisement that ran during a recent Super Bowl explicitly targeted people of any gender, using humor and celebrity appeals. The actor Sarah Michelle Geller, known for her role as Buffy the Vampire Slayer, features in a mock horror film in which she tries to unlock her phone to call for help using its facial recognition function. But she cannot because her use of Olay has kept her looking so young-so much so that the masked murderer also gets distracted from the dastardly deed.5 By leveraging media content (e.g., football, slasher films) that conventionally have appealed to masculine consumers, a product once delegated to a gender-based categorization expands its appeal to include anyone who enjoys a laugh and wants to look at bit younger.

Ethnicity As Ethical & Societal Dilemma 9.1 in this chapter noted, many international corporations are achieving belated recognition of the needs of minority consumers for targeted personal care products. Here, P&G is taking a strong stance as well, determined not just to demonstrate its consistent corporate dedication to diversity but also to appeal widely to diverse consumers.6

At the corporate level, P&G's social awareness campaign "My Black Is Beautiful" aims to redefine and address negative connotations of the word Black by encouraging dictionaries to be more precise and aware of the implications of the definitions they feature.7 For example, the campaign, which takes the hashtag #RedefineBlack, recommends that usage examples include positive phrases such as "Black is beautiful." It also recommends capitalizing Black when used in reference to people's ethnicity. At the product level, P&G paralleled its social awareness campaign with the launch of a My Black Is Beautiful hair care product line, which is "hyper-targeted" toward Black women who prefer natural hairstyles.8

For job seekers in Japan, P&G similarly exhibits its efforts to embrace diversity principles at both corporate and product levels. With marketing for its Pantene brand, the company encourages female job applicants to reject dominant, male-centric norms that require them to slick back their hair into a tight bun before any firm would consider hiring them. The "More Freedom in Job Hunting Hair" campaign promotes more inclusive norms that allow women to express their individual identities. Then Pantene shampoos promise that its unique formulations support Japanese women in achieving the varied, appealing, and diverse hairstyles they prefer.9

Income The combination of competition from low-cost sellers and the growing popularity of beards for hipsters and other identity groups has forced P&G to acknowledge an altered market in which it may need to target shoppers who actively seek low prices. But at the same time, another segment of consumers wants conveniently available luxury products, so P&G positions its different brands to appeal to all of them. For example, it cut prices on its conventional Gillette razors to compete with direct-to-consumer brands like Dollar Shave Club. But it also introduced a line called Gillette Labs that offers luxury razors, including a heated version that costs $200, to target customers who can afford to seek an "elevated shaving experience." To go along with the high-end razors, through its acquisition of the luxury shaving brand The Art of Shaving, P&G can offer even those who shave rarely or minimally luxury beard oils and accessories.10 Its acquisition of the First Aid Beauty brand seeks a similar positioning in a different product market, by selling prestige skin care products at higher price points than its existing brands usually charge, including $58 for a skin serum with retinol.11

Psychographics (Self-Values)

As the previous examples show, P&G knows that it cannot rely exclusively on demographic elements because they are varied and blurry. Therefore, it also considers people's self-values, including their dedication to natural ingredients. Its Herbal Essences shampoo line features two products that were the first mass-produced hair care items to earn certification as safe and environmentally appropriate from the Environmental Work Group.12 To do so, P&G had to submit to far more testing and detailed accreditation procedures than is legally mandated. But in passing the certification, it can appeal effectively to people whose self-values include the ideal of purity in what they put into and on their bodies. In this case they prefer to wash their hair without adding sulfates to the formulation.

In another sector, it purchased Native brand deodorant-a company known as much for its "pumpkin spice latte" scent as for its promise to avoid aluminum and parabens as ingredients. Although it sells at a much higher price point than most widely available deodorants, at about $12 per stick, it also appeals strongly to those with a self-value that includes using products with pure or natural ingredients because they have grown increasingly concerned about the long-term implications of applying products containing "science fair" ingredients to their bodies.13

Question 1: In addition to the list of options presented in this case, how else might a multinational, multibrand conglomerate like P&G segment its millions of customers? Use other ideas from the chapter to suggest other segmentation methods that could be used

Question 2: What other emerging segments of consumers would be attractive for P&G, such that it might start developing new product lines to appeal to them?