McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 6 Market Segmentation and the Marketing Mix: Determinants of Advertising Strategy

6-2 Chapter Overview How marketers use behavioral characteristics to cluster customers into market segments

6-3 Chapter Objectives Identify methods advertisers use to segment consumer and business markets Describe the elements of the marketing mix Explain the importance of aggregation Discuss how target marketing affects advertising strategy Explain the purpose and importance of branding Explain advertising’s role in the mix

6-4 The Market Segmentation Process 1. Identify people with shared needs and characteristics

6-5 The Market Segmentation Process 2. Aggregate these groups into market segments according to their mutual interest in the product’s utility 1. Identify people with shared needs and characteristics

6-6 Shared Characteristics Categories Demographic BehavioristicGeographic Psychographic

6-7 Behavioristic Segmentation Sole Users Semi-Sole Users Discount Users Aware Non-triers Trial/Rejectors Repertoire Users User-Status Purchase-Occasion Benefit Segmentation Benefits-Sought Volume Segmentation Usage-Rate

6-8 Behavioristic Segmentation Charles Schwab targets the benefits-sought market

6-9 Geographic Segmentation o Sales are analyzed by: o Region o Country size o City size o Specific location o Types of stores

6-10 Demographic Segmentation Defining population groups by statistical characteristics

6-11 Demographic Segmentation Hispanic Media Ad Spending Growth Rates

6-12 Psychographic Segmentation Values Attitudes Personality Lifestyles Feelings

6-13 Psychographic Segmentation Consumers are charted by their basis for decision making

6-14 Psychographic Segmentation 10 values shared by people around the world

6-15 Psychographic Segmentation MindBase finds shared patterns of behavior

6-16 Market Segmentation Adidas captures attitude and lifestyle

6-17 Business, Government, & Industry Differences from Consumer Markets Professional buyers Systematic purchasing Categorized by NAICS code Small number of buyers Concentrated geographically

6-18 Business, Government, & Industry NAICS hierarchy and codes can be used to search for prospective clients

6-19 The Target Marketing Process 2. Use the 4Ps of the marketing mix to shape a product concept for the market 1. Select a target market from the market segments identified ProductPricePlacePromotion

6-20 Target Market Selection Levi’s communicate s how slim their jeans are and the relative attractiveness of those who wear them

6-21 Target Market Segments New Empty Nest Young Influentials Park Bench Seniors New Beginnings Home Sweet Home Movers & Shakers Bohemian Mix

6-22 Product Life Cycles

6-23 The Product Element Market Tangibility Consumption rate Classification by… Buying habits Physical description Perceptible Induced Hidden Positioning & Differentiation

6-24 The Product Element Volvo positions itself as owning safety

6-25 Product Branding Individual Family National Private Licensed Words Product Name Design Symbols

6-26 The Most Valuable Brands

6-27 Product Packaging Containment, protection, convenience Identification Economy Consumer appeal These functions may become copy points

6-28 The Price Element Demand Production & distribution Competition Corporate goals & strategies Price Factors:

6-29 The Place (Distribution) Element Intensive Exclusive Selective Indirect Direct Network Buyer Club Vertical Franchises

6-30 The Promotion Element Collateral Materials Sales Promotion Product Advertising Communication Mix Personal Selling Public Relations Direct Marketing