STP simply means segmentation, targeting, and positioning strategies used by different brands and companies to promote their marketing and sales. Before we go deep into each brand's STP, let's understand what segmentation, targeting, and positioning are. Segmentation is the process of dividing a market of potential customers into groups, divisions, or segments depending upon various characteristics. Targeting is a process of evaluating the attractiveness of each market segment who respond in a similar way to a given set of marketing efforts and selecting one or more segments to design and carry out the marketing strategy. And, a positioning strategy is one in which the brand should have the ability to influence customer perception. The objective of market positioning is to establish the image or identity of a brand. It also brings in customer advantage over its competitors.
To explain this further, I have taken three product categories in which I have taken three brands each. The first category that I have taken is Footwear. And, the three brands that I have chosen is Adidas, Nike, and Puma
ADIDAS, which is an abbreviation of All Day I Dream About Sports is one of the most successful sports apparel brands around the globe. On August 18, 1949, Adi Dassler registered the "Adi Dassler Adidas Sportchuhfabrik" and set to work with 47 employees. It thrived and went on to become the force that is today. While the old logo (The Trefoil) communicates the company's aspiration for growth in the ever-changing market, the new logo (The Three Bars) is accompanied by the motto, "Push Beyond the Limits". The new logo resembles a mountain like it is challenging the people who buy their products to push themselves to their limits. A fact is that the new logo has strong brand equity and is well-recognized across the world.
Adidas has mainly done its segmentation in two ways, Demographic and psychographic. Demographic segmentation depends on age, income, family size, etc. Adidas mainly targets consumers between 14-40 years of age. But, it is also like by consumers between 40-65 years of age as well. To cater to its younger audience who are from 14-19 years of age, Adidas has introduced a sub-brand called Adidas Neo. The brand targets both male and female consumers and offers premium quality products. Through psychographic segmentation, Adidas tries to create premium positioning and targets the upper-middle-class and affluent customers. It has a sub-premium to premium pricing strategy and superior quality products result in premium positioning for the brand.
Their targeting strategy mostly covers young adults, adults, and children who have a passion for fitness and sports. Their majority of consumers are from the age group of 13-40 years. These consumers are mostly from the upper-middle-class or luxury class.
Coming to how Adidas positions itself, it does not position itself as a mere sports brand, it is a 'Creator Sports Brand'. It has a user and benefit based positioning. In 2018, it launched the 'Calling All Creators' campaign. This campaign truly opened up the playing field for them. Adidas has the positioning statement, 'Speed, Cities, and Open Source'.
Adidas promotes itself with the Unique Selling Proposition that they make light and convenient sports apparel that others don't make. They want people to buy, so they listen to customers and try to be imaginative and creative in their outcome. With the Single-Minded Proposition that 'Impossible is Nothing', The brand says everything about itself. This SMP is a creative brief about the brand.
I believe that their brand name and their positioning strategy completely compliment each other. With the brand name that says, 'all day I dream about sports', it is positioned in a way that it caters to the sportsperson in you. It is a perfect match for people who are athletic and sporty.
Talking about their market share, it had a share of 6-7 percent of the US market in 2019. It is valued at over 16.48 billion US dollars in 2020. Footwear is a crucial category for Adidas with it generating an annual sale of 50%.
Now, NIKE is a brand that needs no introduction. An American Multinational Corporation, Nike was launched in 1964 and it is the leading fashion brand in sport's shoes and apparel. The name of the company is derived from Nike, the Greek God of Victory. A few sub-brands of Nike are Nike CR7, Air Max, Nike Pro, etc.
Moving on to its STP, Nike has 4 major segmentations. The first one is psychographic segmentation. Nike builds a position in people's minds by connecting with their emotions and aspirations. No matter who you are or what you do, you can always sport a Nike. It addresses itself as an athletic-wear company that has a belief that everyone in the world is an athlete. The demographic segmentation is that it has no age group. It caters to middle and high segment customers of a group. The pricing of Nike is in such a way that it is easily accessible to these groups. The third segmentation is according to behavior. Nike gives out an 'athletic feel'. It has apparels for all walks of life, be it utility based, technology-based, or style based. The last and final segmentation is done geographically. Based on the nations, cities, and areas it caters to, it changes its style and production.
Nike's targeting strategy involves youth that is in the age group of 18-24 years, sports enthusiasts, people living in the urban areas, and members of the high-income groups.
The brand has positioned itself as a ubiquitous brand that declares, 'if you have a body, then you are an athlete'. Nike tries to bring innovation and inspiration to all the athletes around the world. It has shifted its focus from product to attitude. It has the positioning statement, "For serious athletes, Nike gives confidence that provides the perfect shoe for every sport".
Well, talking about Nike's USP, it is nothing but that it sells the best quality shoes for athletes and fitness in general. They sell genuine sports gear for genuine people. Staying true to their words, they have sports stars and not actors as their brand ambassadors. With the SMP "Just Do It", Nike pushes the athlete in you to come forward and steal the limelight.
Just like the brand name is derived from the name of Nike, the Greek God of victory, it perfectly resonates with its positioning strategy. The name of the brand itself manages to instill a certain level of confidence in people.
Nike's market share stands at about 27.4%, making it the largest footwear company in the world(as of 2019). The brand value of Nike all around the world in 2020 is 34.8 billion US dollars.
Coming to my last and final brand in the footwear category, it is none other than Puma. Headquartered in Germany, it was incorporated in 1948 by Rudolf Dassler, It has expanded its reach worldwide, and has more than 12000 diversified and dedicated workforces in 45 nations.
Puma has been segmented in three ways. The first is demographical. It primarily caters to people of the 20-30 years of age group and also delivers to the people in 7-19 and 30-45 years of age group. Talking about their behavioral segmentation, it caters to athletic, active, eccentric, individualistic, blood, and creative consumers who admire originality. As much as the psychographic segmentation is concerned, it does not show any gender bias and portrays itself as the perfect shoes for the achiever and the goal-oriented person in you.
The brand follows a positioning strategy where it commits itself to work in ways that contribute to the world by creating peace, safe sustainability, and creativity. Puma is customer-oriented and gives what the customer wants. Its positioning statement says that it is "Forever Faster", and yearns to achieve it.
The targeting strategy of Puma includes both men and women. There is a huge increase in the women market that purchase Puma. They target people who have outgoing and enjoyment on top of their list. The brand is targeted to people of the upper-middle-class and the affluent classes.
Puma's USP is the moisture-wicking fabric that draws sweat away from your skin and keeps you cool and comfortable when your training heats up. Just like their positioning statement, their SMP too is "Forever Faster", which says a lot on its own.
Like an animal puma, the brand is fast, unexpected, and good-looking. In my opinion, they have aptly chosen a brand name as the name and its strategy go hand-in-hand.
Worldwide, Puma has sales of 5.5 billion US dollars. They also have a gross profit of 2.6 billion Euros around the world. They are behind their rivals, Adidas, Nike, and Reebok.
The next product category that I have chosen is Fast Foods. This category needs no further introduction. And, the three brands that I have chosen are McDonald's, KFC, and Pizza Hut.
McDonald's is the world's largest leading foodservice retailer. Having custom-made burgers according to the country that their franchise is located, they have a strong fanbase and a large number of customers. It serves over 70 million customers in over 100 countries.
McD uses 4 types of segmentation strategies. The first one is a behavioral segmentation is according to the consumer's loyalty, the benefits sought by them, their personality, and their user status. Psychographic segmentation is done with keeping the consumers' social class and lifestyle in mind. The third one is demographic segmentation. It mainly segments the market into children, who get attracted to the free toys and happy meals. Young adults who are of the age group of 18-29, and adults who want burgers that are less calorie and healthy. Finally, The fourth segmentation is geographic. It is broken into segments like America, Europe, Asia/Pacific, Middle East, Africa, and other countries like Canada and Latin America. While India has the McAloo Tikki Burger, McArabia Chicken is available in other countries.
McD's targeting strategy mainly encompasses people who are of the 8-45 age group. Without any gender bias, they target people who are from the lower, working, or middle class. Their burgers are very affordable and they are for the easygoing and careless personalities.
Coming to their positioning strategy, they have an adaptive product strategy and often engage in re-positioning their products to get better sales and marketing. Quoting a line from their franchise strategy document, "McDonald's has made itself to be the family-friendly low-cost restaurant in the fast-food business. We have a narrow scope for a customer base and a low-cost strategy".
The USP of McDonald's is quality, service, cleanliness, and value for money. With an SMP of ''I'm loving it", there's not one soul who has tasted McDonald's and not loved it.
With a brand ambassador of a clown and the brand name accompanying it, everybody who hears the name McDonald's immediately imagines tasty burgers and crispy fries. That's enough to say that they have done a good job.
McD has the leading market share in fast-food restaurants with a percentage of 21.7. It has a brand value of a whopping 129.3 billion US dollars.
The next fast-food chain that I am going to take is none other than KFC. Founded in the year 1930 by Colonel Sanders, KFC is the world's second-largest fast-food chain. It has more than 20,000 stores all around the world.
Just like McD, KFC has the same geographic segmentation. It sells its products according to the geographic needs of the customers and is measurable. For instance, there is KFC Rice Bowl in India and you can find sandwiches in the USA. Psychographic segmentation is only possible when people are living in a luxurious lifestyle that is connected to KFC. They want to attract people who are gregarious, authoritative, and ambitious. KFC is pretty affordable for the middle-class and above. KFC segments the market based on 4 behavioral variables, taste conscious, quality conscious, class conscious, and combination of price and quality. Finally, demographic segmentation is done based on people who fall in the age group of 6-65, people from all walks of life, and with no gender bias.
Although it delivers tasty, fried chicken, KFC targets both non-veg and vegetarian customers. It has dishes on its menu that attracts both adults and children at the same time. The brand positions itself as a family restaurant and runs campaigns to re-affirm the same.
KFC uses its attributes to position itself. It is a high-quality, hygienic, and an affordable fast-food chain. With its positioning statement, "we do chicken right", KFC also differentiates its service in the form of takeaway, dine-in experience, and KFC on Wheels.
The biggest USP for KFC is that nobody makes chicken like they do. That's what's helped them grow their customer base. In connection with their USP, the brand has an SMP of ''It's Finger-Lickin Good!", it just proves that their chicken is delicious and finger-licking worthy.
Kentucky Fried Chicken is synonymous with being the best-fried chicken in the world. I can safely say that nothing more has to be said about KFC being the tastiest chicken globally.
In 2020, KFC had a brand value of 16.5 billion US dollars. It has a market share of 9%-11%.
The final brand that I am taking is Subway. A brand that started in 1965, it was invented by 17-year-old high school graduate, Fred DeLuca. The first store was opened in Bridgeport, Connecticut. They provide tasty as well as nutritious sandwiches.
Subway's segmentation strategy is divided into 3. Geographically, it caters to what the customer wants. It offers halal meat in most Arabian countries, only chicken in India, and more sauces in America. Demographically, it is segmented towards people who come in the age group of 18-39 years. It tries to attract people who are fitness freaks and want yummy, nutritious food. In psychographic segmentation, it attracts who wants to lead a nutritious lifestyle. And what better way than to eat Subway daily?
Their targeting strategy consists of adding new meat and flavors. They also target kids by offering them kids meals which consist of a wrap, vitamin juice, and a fruit roll-up.
Subway's positioning has always been ''Eat Fresh". It has always portrayed itself as a brand that serves fresh products, ready to eat. This is what attracts most of the people.
With the same USP, Subway positions itself as the freshest brand. It has an SMP of ''Our Healthier Way". It definitely is healthy, In my opinion, it aligns with the brand name as it is fast as well delicious and healthy.
Subway has a market share of 51% in the sandwich segment. It has a brand value of 13.7 billion US dollars.
The final product category that I am going to take is the Skincare category. A category that most women swear by, the three brands that I have taken are Pond's, Dove, and L'oreal.
In 1846, Theron.T. Pond produced a witch hazel extract which was initially sold as Golden Treasure. In 1987, the company was acquired by UNILEVER.
Pond's has 4 segmentation strategies. Under demographic segmentation, they mostly target people who are 18 and above, females, and those who have a middle to high income. When the brand is segmented psychographically, they try to attract working-class women who want to have younger-looking skin and women who are conscious about the chemical effects of products and in turn would prefer gentler or baby products. Pond's has the benefit of baby products along with other factors. Geographical segmentation is mainly targetted towards India.
Its targeting strategy concentrates on women who want baby products, and who want gentle products with fewer chemicals.
Its positioning strategy comprises of 4 as well. The attributing strategy is that it has SPF, anti-aging, moisturizer, and so much more. Its benefits are that it has a long-lasting effect, and natural ingredients are used. The brand's prices are lesser than baby products, and it is also available in small packs.
Pond's lives by the USP that it has been listening to woman's needs and desires for over 150 years, and delivering new products customized to their skincare needs. With the SMP that "Miracle is You", they try to instill confidence in the women that use Pond's.
Pond's is now a very common brand in India. With an affordable and high-quality range of products, Pond's manages to successfully achieve their positioning strategy.
With Himalaya leading the market, Pond's has a market share of about 10%-12%.
Dove is the second brand that I'm going to take. Dove is a personal care brand owned by Unilever. The beauty bar was the first item to be developed and sold by Dove. It was produced in 1955.
The brand segments the market based on demographic segmentation and psychographic segmentation. Demographically, Dove focuses on all age groups of women who are above 18. They segment women who use beauty products, who are well aware of beauty and care for their skin, and women who have a high purchasing power and are from the upper-middle-class. Under psychographic segmentation, Dove aims at creating psychology in women's heads that they are beautiful, no matter what.
The brand's targeting strategy targets women of all ages, shapes, and sizes. It highly focuses on working women who hardly have any time to take care of themselves. They also target high-income groups and the upper-middle-class.
Dove positions itself as a beauty product for personal care. All its products are positioned as 'mildly moisturizing', and also has high moisturizing content.
Dove has a USP of 'Deep moisturizing for Dry Skin'. Although it has different SMPs according to their various campaigns, their most recent SMP was "You are more beautiful than you think".
Just like the dove which signifies and calmness, Dove deeply moisturizes your skin and creates a sense of peace. This is why Dove is known as a very soft and gentle beauty care product.
Dove has a market share of 5%in India. Worldwide, it has a brand value of 4.97 billion US dollars.
The third and final brand is L'oreal Paris. A world-famous brand, it entered the Indian market in 1991. It has a wide range of products from shampoos to makeup products.
Under demographic segmentation, L'oreal India specifically targets the females as they are the ones who produce a lot of sales. They also cater to the upper-middle, and upper-affluent class. They are more interested in capturing the market share of the younger Indians. Through psychological segmentation, they want to attract the younger Indians who follow a Westernised culture.
L'oreal targets women who are from the affluent middle class and who seek benefits from using the brand's products.
It positions itself as a brand that gives beauty at a higher cost, which will, in turn, give the users' skin and hair long-lasting benefits. It also has a former Ms. World, Aishwarya Rai as their brand ambassador which makes the consumers believe that they will become beautiful.
L'oreal's USP is that it caters to the beauty demands of women in different cultures through constant research and innovation. With an SMP of "Because you're worth it", the brand tries to tell all women that they are worthy of using L'oreal and its various products.
It had worldwide sales of over 29.8 billion euros and is also one of the leading skincare and haircare brands of the world.
Thus, I conclude my article, in which I have written about several brands and their STPs.
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