marketingmanagement Schultz on Marketing Strategy
From Persuasion to
Shared Value Creation
By Don E. Schultz
 dschultz@northwestern.edu
A
s marketing conditions change, it has become
more obvious that some of our most sacred
marketing concepts simply don’t fit today’s
marketplace, and their continued use can be more of
a hazard to managers than a benefit.
One of the most commonly used tools,
STP—which stands for segmentation,
targeting and positioning—is an
amalgamation of three concepts, all of
which were developed in the 1950s to
’70s and are still in common use today.
Segmentation is the idea that marketers
could identify or carve out groups of
consumers and focus their products
and marketing toward that group.
Discussed initially by Wendell Smith
in the 1950s, segmentation continues
to be advocated, praised and practiced
by marketing academics and managers
around the world.
Targeting is an outgrowth of the
segmentation concept. That is, if the
marketer can identify segments of the
population, then it seems reasonable
that they would be able to direct
their marketing and communication
efforts toward those groups. It’s a great
idea but hard to put into practice.
Historically, most media forms have
been developed for mass markets.
That’s what drives CPM (cost per
thousand), the key measure for most
media. Thus, large demographic
groups, such as women 18 to 49, are
considered target markets, although
they aren’t really targets at all—simply
an agglomeration of people of the same
age group. Therefore, most media is
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focused on “reach,” which is the direct
opposite of targeting.
The third concept in STP is
positioning. Initially developed by Jack
Trout and Al Ries in the early 1970s,
the idea was that every consumer’s
mind was composed of a set of boxes
or compartments, somewhat like a
computer grid. If the marketer’s product
fit the “box” and the seller was able to
fill that niche with a product or service,
all other alternatives would be blocked
and thus rejected by the consumer. It’s a
great selling idea, but later research has
demonstrated that human brains don’t
have niches or compartments. In spite of
While the STP concept was likely relevant
in the time in which it was developed,
it seems totally antiquated today. Yet
brand and marketing organizations, either
actively or implicitly, continue to support
STP simply because that is “what we have
always done.”
that, positioning continues to be one of
the key themes of most marketing plans.
Thus, when the marketing or
brand manager combined the three
techniques, he or she was instantly
rewarded internally since the process
supposedly located the most relevant
prospects for the product to be sold.
Thus, the manager, by focusing on the
STP mantra, could concentrate his or
her marketing efforts with little waste or
overlap, which sounds really good and
almost infallible: Pick the right group,
send the right messages. Get there first
and fill the niche or crevice in the mind
and success was seemingly assured. The
combination of these three tools were
promised, promoted and promulgated
in almost every marketing textbook
in existence and became the litany
that every novice marketer learned
at the knee of the omnipotent brand
manager. Learn this, do this and thou
wilt succeed!
On closer examination, however,
there are a few issues with the STP
concept. First, all the components
were developed in the 1950s through
1970s. That’s over a half-century ago.
In addition, they were developed for
a radically different marketplace than
the manager finds today. Second, the
concept assumes that marketers control
the marketplace and the systems being
used. If the manager gets the segments
right, picks the right targets and gets
there first, he or she will always win
1/21/16 12:54 PM

in the marketplace. While that may
have been true then, the advent of the
Internet, search engines, and almost
suffocating communication systems
around the world—all of which have
provided widespread consumer access
to information—challenge even the
most die-hard STP practitioner. Third,
the concept assumes inherently that all
product and usage knowledge comes
from the product or brand, ignoring such
currently important factors as product/
service experience, communities of users
MN Feb 2016 1-64_1.21.indd 13
Schultz on Marketing Strategy
and peer influence, electronic word-of-
mouth through social media, and a host
of new products that have obviated the
old. For example, Kodak film may still
have a few users, and it may even be
possible to target them with marketing
and messaging. It might still fill the
consumer brain niche for photographic
film, but that still doesn’t make a viable
market for the Kodak brand manager (if
such a creature still exists).
In short, while the STP concept was
likely relevant in the time in which
marketingmanagement
it was developed, it seems totally
antiquated today. Yet brand and
marketing organizations, either actively
or implicitly, continue to support STP
simply because that is “what we have
always done.” It’s in our DNA, ingrained
in our systems just like concepts such
as the fiscal year, slotting allowances
and BFD (“best food day” newspaper
coupons). Academicians continue
to teach STP because it is a catchy
algorithm, (like the four Ps) and provides
some basis for the hoary “war stories”
February 2016 | marketing news 13
1/21/16 12:54 PM
 marketingmanagement
of the past that continue to resound in
most marketing classrooms.
So if not STP, you say, then what
should replace it? After some thought
and consideration, I humbly offer the
new acronym of RMR. That stands for
“recognition, matching and response.”
Here’s how it works: The first R—
recognition—requires the marketing
organization to recognize or identify
the issues, concerns, needs, pain points
or whatever the customer or prospect is
trying to resolve, find solutions for or fill
to make their lives more comfortable,
rewarding, fulfilled or whatever. It
makes right what is currently wrong
or incomplete or missing in their life.
In short, recognition begins with an
individual, a person or a group who
has needs and situations that require
some solution.
How does the marketer recognize
that or those situations? Easy enough.
Simply monitor and listen to the
consumer. No big research project. No
complicated questionnaires. No paid
focus groups. All the marketer has to
do is simply look at what customers are
saying or doing every day in multiple
communication forms. See what they
are saying or doing on Facebook,
discussing on Twitter, posting on
YouTube, and the like. Customers and
prospects are continuously talking
about their needs, wants and desires.
All that really means is that the first
task of the manager is to listen—
something most organizations don’t
do and, for some reason, it seems to be
far down on the “to do” list. Listening
isn’t hard, but it requires the marketer
to actively assemble, consolidate and
format what customers are saying about
themselves, their lives, their wants
and needs and requirements, and on
and on. Most customers and prospects
are talking, almost continuously,
about themselves. The question is, is
the marketer listening?
Once these needs and wants are
recognized, then it is the task of
the brand or marketing manager
to determine whether or not this
requirement is widespread enough to
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Schultz on Marketing Strategy
warrant marketing attention. Obviously
there will be a plethora of needs, wants,
desires, pain points and the like that
the marketer can’t fill. It’s separating
the wheat from the chaff. Given
today’s technology, identifying
coherent, cohesive groups is a simple
task of aggregation.
With that, the next task of the
marketer is to match those customer
needs to the available product or
service assortment that they are
capable of providing. In some cases,
it likely will be found that there are
consumer needs that simply can’t be
filled, but at the same time, there are
usually a number of groups that can
be served. If marketers simply start
with those consumers whose needs can
be filled by the marketers’ products,
success is often just around the corner.
If you’ve been reading the consumer
signals, the ones they have been giving
off continuously, it seems reasonable
and rational to use those same tools
and tactics to advise customers and
prospects on how your product or
service can help solve their problem.
Customers or prospects generally buy
for only one reason: It fills some type
of need or requirement in their lives.
If you’re able to fill that need, then
most of the traditional marketing tools
such as price reductions, combination
offers, loyalty programs, annual
sales events and the like become
superfluous. In short, the marketer
moves from trying to sell something to
someone to helping known customers
buy. From persuasion to shared value
creation: all of those things you have
heard about but have never been able
to employ.
The final element in the acronym
is the R for response. It does little
good to have solutions to customer
problems, needs, wants and desires
unless you are able to communicate
your solution through some type of
communication device, whether that
be broad mass media or more targeted
approaches. If you’ve been reading
the consumer signals, the ones they
have been giving off continuously, it
seems reasonable and rational to use
those same tools and tactics to advise
customers and prospects on how your
product or service can help solve their
problem. Thus, you move from being
the marketer or seller to the need-
filler—a much better position on the
seeker’s scale.
So there you have an instant
solution to the challenge of old
fashioned, old-school marketing in
the form of STP: The answer is RMR.
And best of all, there is no fee or
other requirement to use the concept.
Go ahead and try it. You’ll likely be
pleased with the results. m
Don E. Schultz is a professor
(emeritus-in-service) of integrated
marketing communications at
Northwestern University in Evanston, Ill.
1/21/16 12:54 PM
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