Chapter 4 Target Marketing

Market Segmentation Divide the market into major segments, evaluate them, and then target those segments.

Why Consumers Buy Why do you Buy? Pleasure To satisfy physical needs Psychological needs most products generally satisfy more than one need

How to Study Receivers of Advertising Understanding the product visiting the production facilities talking with designers working with wholesalers or retailers sell the product read trade magazines learn strengths and weaknesses of product learn the competition

How to Study Receivers of Advertising Talk with the consumer

The Buyer’s Behavior Process 1. Problem or need recognition 2. Search for appropriate solutions 3. Evaluation of alternative solutions 4. Purchase decision (brand selection) 5. Purchase implementation 6. Post purchase evaluation

Influences On Buyer Behavior External Factors socio cultural factors culture religion political socialhabits marriage death eating alchol tabocco sex etc

Influences On Buyer Behavior Subculture -- a division within a culture Hispanic Black Irish Mormon Catholic Nebraska

Influences On Buyer Behavior Social class Group factors reference group formal informal

Influences On Buyer Behavior Family Individual factors opinion leaders external conditions Situational factors

Influences On Buyer Behavior Internal Factors Motivation understanding needs perception learning Personality Life styles AOI -- activities, interest, opinions Demographics

What is a product? “Bundle of ingredients put together for sale as something useful to a consumer”

What is a market? A group of people who can be identified by some common characteristics, interest, or problem; who could use the product to advantage; could afford to buy it; and can be reached through some medium.

Target Marketing Defined “Defining prime prospects so you do not waste time and money advertising your product to people unlikely to buy it or people you can not make a profit by attracting.”

Population Trends U.S. population grew 2.5% between 2000 and 2002 Projections (by 2025) 70% growth in South and West Growing older, more diverse Population will exceed 350 million Biggest growth will be in 65 and older set

Multicultural Marketing African-Americans Hispanics Mexican Central and South Americans Puerto Rican Cuban Asians and Pacific Islanders Japanese Chinese Filipino Korean Vietnamese Asian Indians

Other Target Influences Household Income Disposable income Discretionary income Spending Married people Birth rate Aging Women Single-person homes

Generational Marketing “Most agree a generation is defined as 30 years and extends past a single decade.”

Cohorts “A group of individuals that have a demographic statistic in common”

Researchers focus mainly on: Matures Boomers Generation X Generation Y Generation Z (Millennials)

Matures Classic American values Puritan work ethic Self-sacrifice Teamwork Conformity for the common good

Boomers Self-assured Self-absorbed Better educated Self-conscious

Generation X Born 1965-1978 Entrepreneurial Techno-focused Media-savvy Socially tolerant Grew up with divorce; now bringing back family life

Generation Y Born 1979-1995 Techno-savvy Coddles Optimistic Prone to abrupt shifts in taste

Toyota Scion

Majority Fallacy “A term applied to the assumption, once frequently made, that every product should be aimed at, and acceptable to, a majority of all consumers.”

For Discussion Why does a customer choose one brand over another, while another customer chooses something completely different?

Planning the Advertising Segment the market Target your segment Position your product for that segment Communicate your positioning

SWOT Strengths Weaknesses Opportunities Threats

Niche Marketing “Smaller groups of consumers with more narrowly defined needs or unique combinations.”

Purpose of Positioning “To give a product a meaning that distinguishes it from other products and induces people to want to buy.”

How to Approach a Positioning Problem Current position, if any? Desired position? Competition already in that position? Can we occupy and hold that position? Can we stick to one position? Does your creative approach match our positioning strategy?

Psychographic Research Types of products bought Who buys them How people react to products and ads Styles of buying What media reaches them Lifestyle categories