1. Copyright © 2006 Pearson Education Canada Inc. Appendix to Part 1 Consumer Behaviour and Marketing Strategy Consumer Behaviour Canadian Edition Schiffman/Kanuk/Das

2. Copyright © 2006 Pearson Education Canada Inc. Appendix-2 Steps in Developing a Marketing Strategy Segment the Market Choose a Target Market Decide on a Position for the Product Develop a Suitable Marketing Mix Find Ways to Satisfy And Retain Customers

3. Copyright © 2006 Pearson Education Canada Inc. Appendix-3 Market Segmentation The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

4. Copyright © 2006 Pearson Education Canada Inc. Appendix-4 “Best” Customer Segmentation HighCurrent Share Low “ High Low Consumption Lo Lows (starve) Hi Highs (stroke) Low Highs (chase) Hi Lows (tickle)

5. Copyright © 2006 Pearson Education Canada Inc. Appendix-5 Purposes of Segmentation Studies To discover the needs of specific consumer groups to develop specialized products to satisfy specific group needs (e.g., Centrum http://www.centrum.ca) To guide the repositioning of a product (e.g., Nintendo http://www.nintendo.ca) To identify the most appropriate media for advertising (e.g., People and Teen People)

6. Copyright © 2006 Pearson Education Canada Inc. Appendix-6 Bases for Segmentation Geographic Segmentation Demographic Segmentation Psychological Segmentation Psychographic Segmentation Socio-cultural Segmentation Use-Related Segmentation Usage-Situation Segmentation Benefit Segmentation Hybrid Segmentation Approaches

7. Copyright © 2006 Pearson Education Canada Inc. Appendix-7 (continued)

8. Copyright © 2006 Pearson Education Canada Inc. Appendix-8 Figure A-2 (continued) (continued)

9. Copyright © 2006 Pearson Education Canada Inc. Appendix-9 Figure A-2 (continued)

10. Copyright © 2006 Pearson Education Canada Inc. Appendix-10 Geographic Segmentation The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, province, or city).

11. Copyright © 2006 Pearson Education Canada Inc. Appendix-11 Demographic Segmentation Age Sex Marital Status Income, Education, and Occupation

12. Copyright © 2006 Pearson Education Canada Inc. Appendix-12 Marital Status Households as a consuming unit –Singles –Divorced –Single parents –Dual-income married

13. Copyright © 2006 Pearson Education Canada Inc. Appendix-13 Psychological Segmentation Motivations Personality Perceptions Learning Attitudes

14. Copyright © 2006 Pearson Education Canada Inc. Appendix-14 AIOs Psychographic (lifestyle) variables that focus on activities, interests, and opinions.

15. Copyright © 2006 Pearson Education Canada Inc. Appendix-15

16. Copyright © 2006 Pearson Education Canada Inc. Appendix-16 Socio-cultural Segmentation Family Life Cycle Social Class Culture, Subculture, and Cross-Culture

17. Copyright © 2006 Pearson Education Canada Inc. Appendix-17 Family Life Cycle Phases families go through in their formation, growth, and final dissolution –Bachelorhood –Honeymooners –Parenthood –Post-parenthood –Dissolution Explicit basis: marital status, family status Implicit basis: age, income, employment

18. Copyright © 2006 Pearson Education Canada Inc. Appendix-18 Use-Related Segmentation Rate of Usage –Heavy vs. Light –Convert light users to medium or heavy users By identifying new uses for the product –Attempt to satisfy heavy users well By making sure the product continues to meet their needs »continued

19. Copyright © 2006 Pearson Education Canada Inc. Appendix-19 Use-Related Segmentation Awareness Status –Aware vs. Unaware –Convert ‘unaware’ to ‘aware’ Brand Loyalty –Brand Loyal vs. Brand Switchers –Satisfy and reward brand loyal users By providing rewards for continued usage

20. Copyright © 2006 Pearson Education Canada Inc. Appendix-20 Usage-Situation Segmentation Segmenting on the basis of special occasions or situations Example Statements: –Whenever I do well in a course, I treat myself with -- -----. –When I’m away on business, I try to stay at a suites hotel. –I always take a bottle of French wine when I am invited to a friend’s house for dinner

21. Copyright © 2006 Pearson Education Canada Inc. Appendix-21 Benefit Segmentation Segmenting on the basis of the most important and meaningful benefit –Crest – Cavity prevention –Sensodyne – Gentle on sensitive teeth –Topol – removal of tobacco stains

22. Copyright © 2006 Pearson Education Canada Inc. Appendix-22 Hybrid Segmentation Approaches Psychographic-Demographic Profiles Geodemographic Segmentation SRI Consulting Group’s Values and Lifestyle System (VALS TM )

23. Copyright © 2006 Pearson Education Canada Inc. Appendix-23

24. Copyright © 2006 Pearson Education Canada Inc. Appendix-24 Criteria For Effective Targeting of Market Segments Identification Sufficiency Stability Accessibility

25. Copyright © 2006 Pearson Education Canada Inc. Appendix-25 Segmentation Strategies Concentrated Marketing – focusing on one target market alone –Suitable for small or new companies Differentiated Marketing –Focusing on several segments at the same time –Suitable for financially strong companies with a several offerings in a product category »continued

26. Copyright © 2006 Pearson Education Canada Inc. Appendix-26 Segmentation Strategies Counter-segmentation Strategy –Merging two or more segments into one larger segment –When target markets do not warrant separate strategies anymore –When consumer needs become more similar over a period