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Market Segmentation and Strategic Targeting CHAPTER THREE.

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Presentation on theme: "Market Segmentation and Strategic Targeting CHAPTER THREE."— Presentation transcript:

1 Market Segmentation and Strategic Targeting CHAPTER THREE

2 Learning Objectives 1.To Understand Why Market Segmentation Is Essential. 2.To Understand the Criteria for Targeting Selected Segments Effectively. 3.To Understand the Bases for Segmenting Consumers. 4.To Understand How Segmentation and Strategic Targeting Are Carried Out. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall2Chapter Three Slide

3 What Kind of Consumer Does This Ad Target? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall3Chapter Three Slide

4 This Ad Targets Runners Who Are Physically Active People and Also Relish the Outdoors. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall4Chapter Three Slide

5 Why Segmentation is Necessary Consumer needs differs Differentiation helps products compete Segmentation helps identify media Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall5Chapter Three Slide

6 Positioning The value proposition, expressed through promotion, stating the product’s or service’s capacity to deliver specific benefits. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall6Chapter Three Slide

7 Criteria for Effective Targeting IdentifiableSizeable StableAccessible Congruent with the company’s objectives and resources Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall7Chapter Three Slide

8 Which Distinct Benefit Does Each of the Two Brands Shown in This Figure Deliver? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall8Chapter Three Slide

9 The Dentyne Ad’s Benefit is Fresh Breath and the Nicorette Ad is Whitening and Smoking Cessation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall9Chapter Three Slide

10 Bases for Segmentation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall10Chapter Three Slide

11 Discussion Questions Considering the largest bank in your college’s city or town: – How might consumers’ needs differ? – What types of products might meet their needs? – What advertising media makes sense for the different segments of consumers? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall11Chapter Three Slide

12 Consumer-Rooted Segmentation Bases DemographicsGeodemographicPersonality TraitsLifestylesSociocultural Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall12Chapter Three Slide

13 Demographic Segmentation AgeGender Marital Status Family Life- cycle Income, Education, and Occupation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall13Chapter Three Slide

14 Discussion Questions What types of marketers might segment according to social class? What ethical issues might marketers have when marketing to different social classes? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall14Chapter Three Slide

15 Geodemographic Segmentation Based on geography and demographics People who live close to one another are similar “Birds of a feather flock together” Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall15Chapter Three Slide

16 One PRIZM Segment - Table 3.4 (excerpt) MOVERS & SHAKERS 1.59 of U.S. households, Median household income: $95,372, Predominant employment: Professional Social group: Elite suburbs, Life stage group: Midlife success, Key education level: College grad+ Adult age range: 35–64 CHARACTERISTICS Movers & Shakers is home to America’s up-and-coming business class: a wealthy suburban world of dual-income couples who are highly educated, typically between the ages of 35 and 54 and often with children. Given its high percentage of executives and white-collar professionals, there’s a decided business bent to this segment: Movers & Shakers rank number-one for owning a small business and having a home office. LIFESTYLE TRAITS: Go scuba diving/snorkeling, Plan travel on the Internet Read PC Magazine, Listen to adult contemporary radio Drive a Porsche Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall16Chapter Three Slide

17 Personality Traits People often do not identify these traits because they are guarded or not consciously recognized Consumer innovators – Open minded – Perceive less risk in trying new things Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall17Chapter Three Slide

18 Lifestyles Psychographics Includes activities, interests, and opinions They explain buyer’s purchase decisions and choices Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall18Chapter Three Slide

19 Discussion Questions How might you differ from a person with similar demographics to yourself? How would this be important for marketers? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall19Chapter Three Slide

20 Two Views of Post-Retirement Lifestyle Table 3.6 (excerpt) AS AN OPPORTUNITY TO MAKE A NEW START This group regards retirement as an exciting time. Work will have been largely unrewarding, so the transition is seen as a freedom from the constraints of their former role. Retirement will invigorate such people and inspire them toward undertaking activities that work largely prevented them from pursuing. AS A CONTINUATION OF THEIR PRE-RETIREMENT LIFESTYLE To such people, retirement is not perceived as signaling a drastic change. Work life has not been as unsatisfying as for others, hence its ending is not greeted with euphoria. There is, however, some satisfaction that retirement permits more opportunity to devote time to existing activities outside of their working role. The future is likely to see an increase in such activities but no real desire to engage in new ones. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall20Chapter Three Slide

21 VALS – Figure 3.4 Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall21Chapter Three Slide

22 Socio-Cultural Values and Beliefs Sociological = group Anthropological = cultural Include segments based on – Cultural values – Sub-cultural membership – Cross-cultural affiliations Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall22Chapter Three Slide

23 Consumption-Specific Segmentation Bases Usage rateUsage situationBenefit segmentation Perceived brand loyalty Brand relationship Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall23Chapter Three Slide

24 Consumption-Specific Segmentation Usage-Behavior Usage rate – Awareness status – Level of involvement Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall24Chapter Three Slide

25 Consumption-Specific Segmentation Usage-Behavior Usage-situation segmentation – Segmenting on the basis of special occasions or situations – Example : When I’m away on business, I try to stay at a suites hotel. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall25Chapter Three Slide

26 Which Consumption-Related Segmentation Is Featured in This Ad? Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall26Chapter Three Slide

27 This is an Example of a Situational Special Usage Segmentation. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall27Chapter Three Slide

28 Benefits Segmentation Benefits sought represent consumer needs Important for positioning Benefits of media Copyright 2010 Pearson Education, Inc. Publishing as Prentice HallChapter Three Slide 28

29 Benefits Visiting Tourists Seek in National Park – Table 3.13 (excerpt) SegmentDescription EnvironmentalistsInterested in an unpolluted, un-spoilt natural environment and in conservation. Not interested in socializing, entertainment, or sports. Desire authenticity and less man-made structures and vehicles in the park. Want-it-all TouristsValue socializing and entertainment more than conservation. Interested in more activities and opportunities for meeting other tourists. Do not mind the “urbanization” of some park sections. Independent TouristsLooking for calm and unpolluted environment, exploring the park by themselves, and staying at a comfortable place to relax. Influenced by word of mouth in choosing travel destinations. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall29Chapter Three Slide

30 Brand Loyalty and Relationships Brand loyalty includes: – Behavior – Attitude Frequency award programs are popular Customer relationships can be active or passive Retail customers seek: – Personal connections vs. functional features Banking customers seek: – Special treatment – Confidence benefits – Social benefits Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall30Chapter Three Slide

31 Implementing Segmentation Strategies Micro- and behavioral targeting – Personalized advertising messages – Narrowcasting Mobile – Use of many data sources Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall31Chapter Three Slide

32 Sample Acxiom Clusters - Table 3.16 (excerpt) Shooting Stars Still relatively young at a mean age of 36, and with top rankings for income, college education, home value and net worth, these consumers have the world by the tail. Feeling financially secure with large investment portfolios, Shooting Stars spend their disposable Income making life a comfortable one, focusing on health, exercise, gourmet food, golf, and travel. Tots & Toys Two things—work and family—consume these professional working couples. They’re putting their college degrees into action, climbing the corporate ladder for lucrative careers, while saving for their children’s education through do-it-yourself home improvements and trips to the zoo for entertainment. With time at a premium, it’s not surprising that the radio is the most relied-upon source for news and entertainment. Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall32Chapter Three Slide

33 Implementing Segmentation Strategies Concentrated Marketing – One segment Differentiated – Several segments with individual marketing mixes Countersegmentation Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall33Chapter Three Slide

34 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall34Chapter Three Slide


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