1. Chapter 4
Target Marketing

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

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

4. 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

5. How to Study Receivers of Advertising
Talk with the consumer

6. 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

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

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

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

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

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

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

13. 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.

14. 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.”

15. 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

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

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

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

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

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

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

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

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

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

25. Toyota Scion

26. 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.”

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

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

29. SWOT
Strengths
Weaknesses
Opportunities
Threats

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

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

32. 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?

33. 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