INTRODUCTION

STP – SEGMENTING, TARGETING AND POSITIONING

Market segmentation is a process in which groups of buyers within a market are divided and
profiled according to a range of variables, which determines the market characteristics and
tendencies. In marketing, STP (Segmenting, Targeting and Positioning) is a broad
framework that summarizes and simplifies the process of market segmentation.
 Segmentation comprises identifying the market to be segmented; identification,
selection and application of bases to be used in that segmentation; and development of
profiles.
 Targeting is the process of identifying the most attractive segments from the
segmentation stage, usually the one which is more profitable for the business.
 Positioning is the final process, and is the more business-orientated stage, where the
business must assess its competitive advantage and position itself in the consumer's
minds to be the more attractive option in these categories.

In addition, STP focuses on commercial effectiveness, selecting the most valuable segments
for a business and then developing a marketing mix and product positioning strategy for each
segment.

PROCESS OF STP
Step 1: Define your target market, trends and scope of segmentation.
Step 2: Perceptual Mapping and Market Mapping
Step 3: Construct a Model of the market
Step 4: Identifying Segments
Step 5: Segmenting
Step 6: Evaluating Market Segments
Step 7: Selecting Market Segments
Step 8: Targeting
Step 9: Know your target audience well
Step 10: Identify the product features
Step 11: Unique selling Propositions
Step 12: Know your competitors
Step 13: Ways to promote brands
Step 14: Maintain the position of the brand

METHODS OF SEGMENTATION

Market segmentation is a business practice relying on research that leads the direction of how
a business divides its target market into smaller, more manageable groups based on common
ground they share. Simply put, customers of each market segment have similar characteristics
that businesses can leverage to optimize their marketing, advertising, and sales efforts.
The purpose of segmentation is that you are able to introduce a more tailored message that will
be received successfully. This is advantageous for companies who may have a product or
service in the marketplace that boasts multiple benefits or uses for different types of customers.
There are four types of market segmentation, they are

GEOGRAPHIC SEGMENTATION
Geographic segmentation targets customers based on a predefined geographic border.
Differences in interests, values, and preferences vary dramatically throughout cities, states,
and countries, so it is important for marketers to recognize these differences and advertise
accordingly.
DEMOGRAPHIC SEGMENTATION
Demographic segmentation divides a market through variables such as age, gender, education
level, family size, occupation, income, and more. This form of segmentation is a widely used
strategy due to specific products catering to obvious individual needs relating to at least one
demographic element.
PSYCHOGRAPHIC SEGMENTATION
Unlike geographic segmentation and demographic segmentation, psychographic
segmentation focuses on the intrinsic traits your target customer possesses. Psychographic
traits can range from values, personalities, interests, attitudes, conscious and subconscious
motivators, lifestyles, and opinions. To understand your target customers on this level,
methods such as focus groups, surveys, interviews, and case studies are used.
BEHAVIORAL SEGMENTATION
Behavioral segmentation has similar measurements to psychographic segmentation but
focuses on specific reactions and the way customers go through their decision making and
buying processes. Attitudes towards your brand, the way they use it, and their knowledge
base are all examples of behavioral segmentation. Collecting this type of data is similar to the
way you would find psychographic data. Brand loyalty is an excellent example of behavioral
segmentation.
 RAY-BAN

In 1937, the American company Bausch & Lomb established the Ray-Ban brand of sunglasses
and eyeglasses. In the years since, Ray-Ban has developed into and extremely successful
fashion brand, with design classics such as the Aviator and Wayfarer making Ray-Ban a world
leader.
Timeless style, authenticity and freedom of expression are the core values of Ray-Ban, a leader
in sun and prescription eyewear for generations. Since the introduction of the iconic Aviator
model created for the aviators of the United States Army, Ray-Ban has been at the forefront of
cultural change, becoming a symbol of self-expression, worn by celebrities and public figures
all around the world. The lifestyle brand joined the Luxottica Group (Italian eyewear
conglomerate) in 1999 after which Ray-Ban accelerated its growth and redefined its
distribution. As of December 31, 2018, Luxottica operated 213 locations, mainly in China.
 PRODUCT MIX – RAY-BAN

Ray-Ban is a popular global brand which offers sunglasses and has a strong popularity all
over the world. Ray-Ban follows the customer need approach in designing the framework of
their sunglasses which makes it way more attractive for customers. The products portfolio in
its marketing mix are sunglasses (Aviator, Wayfarer, Clubmaster, round, Justin, Erika),
Optics (The Clubmaster RB5154, The Timeless RB5228, The New Wayfarer RB5184, The
Round RB2180V, For Her RB5255, Erika RB7046), Lenses (Lens category – classic,
gradient, special, polarized), Lens Ranges (Green lenses G15, Brown Lenses B15, Mirror,
Legends). Ray-Ban has also an approach to build up the sunglasses on the demands of users
with the special features like protection through UV rays. Ray-Ban continuously keep
tracking the demands and need of the customers and from the long time it has been successful
in keep changing its products with the fashion and also been able to fit its products according
to different culture all over the world. Ray-Ban products manufacturing is mainly done in the
6 manufacturing plants situated in Italy, China, Brazil, India and United states.
Ray-Ban has brought a large range of sunglasses and eyewear to the market. The brand is
particularly well known for its aviator sunglasses. The aviator model was released for the
United States Army. However, it acquired global fame and became the most loved eyewear
of celebrities and public figures. The Ray-Ban range of sunglasses includes aviator, wayfarer,
Ferrari, Clubmaster, Justin and Erika. Apart from these, the brand has also brought more
collections and eyeglasses. Ray Ban products have both quality and style. Luxottica is an
innovative brand that has made and continues to make improvements to the existing Ray-Ban
range of glasses.
 MAPPING – RAY-BAN

Product mapping is the practice of matching your products to your competitor’s products in
order to make accurate, apples-to-apples price comparisons. This allows retailers to gain a
better understanding of these products and implement data-driven interventions to
improve conversions.
COMPARISON WITH FASTRACK - COMPETITOR IN INDIA

CRITERIA RAY-BAN FASTRACK

Memorability Very High Very High
Brand Awareness Very High Very High
Brand Association Very High High
Meaningfulness High High
Likeability High High
Transferability Medium High
Adaptability Low High
Protectability Low Low

SEGMENTATION TOOL

The common ground is that most companies in this world of capitalism always want more.
They want more profit, more shareholder value, and more market share, among others. The
realizations of these objectives have been attained through the successful initiation,
development and management of marketing strategies in most instances. Ray-Ban Company is
one of the known companies around the world dealing with sunglass as a product.
Ray-Bans were created in [Link]-Ban in its operations targets consumers of the age between
12 and 30. This was initiated after critical analysis based on eye testing conducted in Zhejiang,
Japan. Ray-Ban maker of the shades that are being worn by stars of the men in black movies
has introduced its first global branding effort. The name of the targeted group is young
professionals. The table below analyses the young professional’s population and income status.

Groups Population in millions Income

Married 2.5 20,000$

Unmarried 1.8 30,000$

Consumers have perceived value in Ray-Band because it costs less for them to buy as
contrasted with competing brands offering similar benefits-costs driven benefits-and or when
they have unique benefits that offset their premium prices-value added brands. From Ray-
Bands point of view, the options presented are on whether to pursue a cost-driven or value-
added competitive advantage in the support of either a broad or narrow approach to the target
markets.
DEMOGRAPHIC
This group prefers anti-glare glasses because of their good educational background and steady
income generation. The analysis factors that targets customers make a purchase of sunglass
and also sympathise with the product. Towards this, critical elements makes Ray-Band more
personal and thus be endowed with the capacity to achieve long lasting customer loyalty. It is
vividly seen that out of this group, 70% are male while 30% are female. This is due to the fact
that in Zhejiang, engineering works that produce intense light are subjected to males. This has
varied the spending ratio of male to female. That is ratio of 4:2.
However, the occupations of young professionals has presented challenges, especially in the
case where Ray-Band have not been able to accurately evaluate and assess their brands
particular strengths and weaknesses objectively, take keen cognizance of intercultural
communication and underline customer preferences.
BEHAVIOURAL
The frequency in which the sunglasses are bought by the group has been depicted to be high.
This is due to the fact that their choices based on sunglasses are of quality. The maintenance
of sustained value added attributes to be derived from a consumer brand and determine brand
attachment or detachment is in essence the key to competitiveness. According to Reda, (1999),
brands are a direct consequence of the strategy of market segmentation and product
differentiation. This point has been buttressed by Brassington and Pettit (2000) who have
pointed out that branding act as a means of linking items within a product line or emphasising
the individuality of product items. Other definitions have been advanced in literature but the
key concurrence has been the emphasis on uniqueness and value provision to the consumer in
a more efficient manner. This in essence has given rise to competitiveness in the market of ray-
Band products. It been has noted, the key to success lies in finding a competitive advantage
that others find hard to copy or imitate. Indeed, academic and empirical literature is of the
opinion that companies such as Ray-Band that develop brands with a strong consumer franchise
to be sufficiently insulated from any promotional strategies by the competitors. According to
the author, this has been the reason why it makes sense for a supplier to invest heavily in order
to create strong or even global recognition and preference for its brand name.
The table below analyses the buying rate of sunglasses in Ray-Ban Company.

Consumers category Spending per shop Annual spending Potential spend

Married 150$ 1800$ 100$

Unmarried 200$ 2400$ 120$

ADVANTAGES OF SEGMENTATION

 Become a classic brand which has been in the market for a very long time.
 Eyewear for rugged and outdoor use.
 Positioned as durable, stylish and young.
 Ray-Ban has an existing distribution network.
  Ray-Ban has a consistent brand loyalty as consumers recognize its quality products.
 The brand visibility is very strong with movie actors, politicians, musicians wearing
the iconic sunglasses.
 Ray-Ban is the pioneer of evergreen styles like Aviators, Wayfarers, Clubmasters and
Jackie Ohh.
 Ray-Ban is the most trusted brand for protection of eyes.
 The products are easily available in the market.
 The brand fits in a budget as well as luxurious market.
 The brand has entered the powered eyewear market too.
 The brand comes in different colours, fitting every age group.
 The brand has kids’ eyewear.
 Ray-Ban can enter other markets like clothing, watches and bags.
 The brand can increase its visibility via social media such as Facebook and Twitter.
 The brand can associate with music festivals like Tomorrowland and Coachella.
 The brand can create more designs in eyewear.

CHALLENGES AND DIFFICULTY FOR SEGMENTATION

Ever since its invention, the Ray-Ban has been all about aspiration. From its original concept
of sunglasses for American airmen, and through its many celebrity endorsements, Ray-Ban has
marketed itself as the brand that everyone wants to be seen in. Owning a pair of Ray-Bans
should be the ultimate dream for every fashion-conscious individual who wants to look like
their hero. The invention of the Ray Ban Aviator.
The invention of the iconic Ray-Ban Aviator brand has its roots in the meteoric rise of the
power of flight. In the 1930s the swift development of military aircraft design allowed pilots
to travel ever farther, faster and higher. But this created a problem.
Pilots reported that the high levels of glare they experienced as they flew high and fast were
leading to vision problems, headaches and altitude sickness. This naturally reduced their ability
to function at the high levels needed for military action. A solution was needed.
Sometime previously, Lieutenant General John McCready had taken a balloon flight. During
this balloon flight, he had been dazzled by the sun. He then conceived the idea of a pair of
dark glasses which would shade his eyes while letting him see what was around him.
McCready was convinced that this type of eyewear would solve the problem of glare for the
pilots. He approached B&L with a request to create sunglasses that could limit the glare
without restricting the pilot's vision. B&L set to work on developing dark glasses. Following
several experiments, the prototype sunglasses with plastic frames and green lenses were
produced in 1936. Thus the Aviator appeared.
The following year the plastic frames were replaced by metal ones. However, it was
considered that the term 'anti-glare' wasn't sufficiently striking enough to sum up the appeal
of these new glasses. So the term 'Ray-Ban' was adopted instead, along with the Aviator tag
as a nod to the aviation link.
 There are many similar brands in the market that have emerged over the years.
 The iconic styles created by Ray-Ban have been copied by numerous companies.
 Since it’s a classic brand, people refer to it as old fashioned.
 The products are highly priced.
 Competition is very high in the sunglasses market.
 Budget manufacturers copying Ray-Ban’s iconic designs.
 The global economic fall is a major threat.
 Fall of sale in off-season.

TARGETING – RAYBAN

The sun-glass market in India is largely under-developed:

1. The organised sector is very small - it basically consists of international
brands like Ray-ban (Rs. 1000+) and large local brands like Monalisa and
Sunlit. These sunglasses are priced anywhere upwards of Rs. 350.
2. The unorganised segment has two types of players:
 About 1000 small-scale manufacturers selling sunglasses between
Rs.80 and Rs 400.
 Dealers and hawkers selling products made in Taiwan and Hong
Kong and sold as "Ray Ban".

The Brand
Ray-ban is a premium international brand - its competitive advantage is derived from
superior technology and an established brand name.

The Competition
Ray-Ban in India, competes not with other sunglasses, but with premium brands from
other categories. This is because it is not necessary that a person who purchases a
premium brand in a particular category will want to or be able to do so in other
categories - there is a trade-off done by the consumer between premium brands in
different product categories.

The Ray-Ban owner profile is:

 Male 20-45 years, educated
 Businessman/executive/student
 More affluent (durable ownership, air travel, foreign trips)
 Likes to pamper self
 Early adopter of durable
 Fashion/style/appearance conscious
 Likes to be distinctive in a crowd
 A “Yuppy”or a "Puppy"

TARGET MARKET

 Focus: Young – From Millennials to Gen-x

 Age: 20-50
 Geographic’s: City to Suburban
 Gender: Both Male And Female
 Income: Upper Middle Class – Not the most expensive glasses compared to
competitors like Prada and Tom Ford. RayBan price ranges from $160 - $800
  Market Section: Lifestyle/ Fashion Brand and less of a performance brand
compared to Oakley
 Ethnicity: White
 Life Cycle: Bachelor – Newlywed – New Empty Nest
 People wanting optical lenses with style.
 People seeking social status
 Fashion conscious

The marketing department of B&L has analyzed certain data and arrived at the
following conclusions:
A product change is not required because Ray-Ban are technologically superior
in quality, and recognized by the consumer as such. The brand is seen as
expensive, but the same consumer does pay as much of a premium for top-end
brands in other product categories. Therefore there is a need for the
communication to change this consumer perception of "Nice, but not necessary".
 Therefore value-for-money perception
 `Indian' as good as `imported'
 Ray-ban is more than a sun-glass
 Positive word-of-mouth

POSITIONING – RAYBAN

It is being estimated that the market size for sunglasses is about 80 thousand pairs.
However, the penetration of this product is only 500,000 pieces, i.e. only 6% of the
Target Group.
It was interesting to observe that the other personal goods had high penetration
levels. For example, the quartz watches had 72% penetration and even the imported
cameras had a penetration level of 24%.
Ray Ban (India) was not doing well and its sales for the period Jul-Dec 1992, were
28,000 units and for Jan-Dec 1993 were 110,000 units, only. In terms of pricing, the
prices of Ray ban were not too high as compared to the imported sunglasses and the
other personal goods.

Sunglasses Price Range (Rs.)

Local 150-400
Pirate 50-800
Ray ban 1,340-2,320
Imported/Smuggled 1,200-35,000

In terms of Distribution, the Ray Ban Sunglasses were available is more than 50
percent (170 out of 310) class I towns. However of out-lets were the opticians shops.
 Where are we in the mind of our consumer?
Sunglasses were generally seen as Eye-wear (Fashion), and not Eye-care (protection).
Even the eye-care role was perceived as "block glare and dust". Perhaps it is because
of these reasons the Ray ban sunglasses were low on priority v/s other fashion goods,
like; designer apparel, quartz watch, camera (imported), cologne, leather briefcase,
Walkman, premium sports shoes, sports accessories.
The awareness about the brand is low (36 percent). Even those who were aware, had
a diffused image. Most of them felt that the prices are high and for such a high price,
they do not see any clear rational benefit.

CONCLUSION
The STP process of Ray-Ban helps them in the following ways:

 Segmentation splits buyers into groups with similar needs and wants to best utilize a
firm's finite resources through buyer based marketing.
 Attract the right customer.
 Reduce risk in deciding where, when, how, and to whom a product will be marketed.
 Increase marketing efficiency by directing effort specifically toward the designated
segment in a manner consistent with that segment's characteristics.
 Helps in customer retention.
 Customer delight.
 Reduce the cost of the company by not marketing the product where it is not
required.