Chapter 6 Market Segmentation and the Marketing Mix: Determinants of Advertising Strategy William F. Arens Michael F. Weigold Christian Arens McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Overview How marketers use behavioral characteristics to cluster perspective customers into market segments
Chapter Objectives Define market segmentation and describe its purposes Explain the target marketing process Show how IMC is used with the product element in marketing Illustrate how IMC is used with the price element in marketing Review how IMC is used with the place element in marketing Discuss how IMC is used with the communication element in marketing
Q. 1. Define Market Segmentation.
The Market Segmentation Process 1. Identify people with shared needs and characteristics Demographic Behavioristic Geographic Psychographic Shared Characteristics Categories 2. Aggregate these groups into market segments according to their mutual interest in the product’s utility
Segmenting Consumer Markets
Q. 2. What are the four bases for segmenting markets?
Behavioristic Segmentation Sole Users Semi-Sole Users Discount Users Aware Non-triers Trial/Rejectors Repertoire Users User-Status Purchase-Occasion Volume Segmentation Usage-Rate Benefit Segmentation Benefits-Sought
Geographic Segmentation Sales are analyzed by: Region Country size City size Zip code Types of stores
Demographic Segmentation
Demographic Segmentation
Psychographic Segmentation Feelings Values Lifestyles Personality Attitudes
Market Segmentation Adidas captures attitude and lifestyle
Psychographic Segmentation
Psychographic Segmentation 10 values shared by people around the world
Psychographic Segmentation MindBase finds shared patterns of behavior
Business, Government, & Industry Professional buyers Concentrated geographically Differences from Consumer Markets Many purchase decision factors Small number of buyers Categorized by NAICS code
Business, Government, & Industry
Market Concentration Note the importance of the Midwest and California to manufacturing marketing
Aggregating Market Segments Select Groups Interested in Public Utility Whole market Specific market Combine Groups to Build Target Market Segments Homogeneous Profit Potential
Defining the Target Market
The Target Marketing Process 1. Select a target market from the market segments identified 2. Use the 4Ps of the marketing mix to shape a product concept for the market Product Price Place Promotion
Target Market Segments Park Bench Seniors New Empty Nest Movers & Shakers New Beginnings Young Influentials Bohemian Mix Home Sweet Home
Q. 4. Explain the relationship between advertising and the Product element of the marketing mix.
Product Life Cycles
The Product Element Market Tangibility Consumption rate Buying habits Physical description Classification by… Own a word Market segment appeal Benefits offered Positioning Classification Differentiation
The Product Element Perceptible Induced Hidden Differentiation
Product Branding Goal is brand loyalty Individual Family National Name Individual Family National Private Licensed Words Design Symbols
The Most Valuable Brands
Containment, protection, convenience Product Packaging Identification Consumer appeal Containment, protection, convenience Economy These functions may become copy points
Q. 5. Explain the relationship between advertising and the Price element of the marketing mix.
The Price Element Price Factors: Demand Production & distribution costs Competition Corporate goals & strategies Variable influences
Q. 6. Explain the relationship between advertising and the Place element of the marketing mix.
The Place (Distribution) Element Direct Indirect Vertical Network Intensive Franchises Selective Buyer Club Exclusive
Q. 7. Explain the relationship between advertising and the Promotion element of the marketing mix.
The Promotion Element Personal Selling Product Advertising Communication Mix Direct Marketing Sales Promotion Public Relations Collateral Materials