1. 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.

2. Charles Finney ( )

3. Chapter Overview
How marketers use behavioral characteristics to cluster perspective customers into market segments

4. 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

5. Old Spice/W+K Isaiah Mustafa – Shower Isaiah Mustafa – Scent
New Old Spice Guy Fabio
Terry Crews

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

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

8. Q. 1. Define Market Segmentation.

9. The Market Segmentation Process
1. The division of the market into homogenous groups
Demographic
Behavioristic
Geographic
Psychographic
Shared Characteristics
Categories
2. Aggregate these groups into market segments according to their mutual interest in the product’s utility

10. Segmenting Consumer Markets

11. Q. 2. What are the four bases for segmenting markets?

12. 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

13. Market Segmentation Insert photo 6.4, p. 171 Mammut ad
User status: Mammut ad targets its repertoire users who are concerned with quality
Insert photo 6.4, p. 171
Mammut ad
Position = 2.9“ horizontal, 1.5“ vertical
Size = 5.7” WIDE
Resolution = 300 dpi

14. Market Segmentation Insert photo 6.5, p. 172 Columbia sportswear ad
Purchase occasion: Columbia seasonal gear ad
Insert photo 6.5, p. 172
Columbia sportswear ad
Position = 2.9“ horizontal, 1.5“ vertical
Size = 5.7” WIDE
Resolution = 300 dpi

15. Geographic Segmentation
Sales are analyzed by:
Region
Country size
City size
Zip code
Types of stores

16. Demographic Segmentation

17. Demographic Segmentation

18. Psychographic Segmentation
Feelings
Values
Lifestyles
Personality
Attitudes

19. Market Segmentation
Adidas captures attitude and lifestyle

20. Target Market Selection
Harley-Davidson ad appeals to likely customers who want to stand out in the ordinary
Insert photo 6.10, p. 186
Harley-Davidson ad
Position = 2.9” horizontal, 1.5” vertical
Size =5.7” WIDE
Resolution = 300 dpi

21. Psychographic Segmentation

22. Psychographic Segmentation
10 values shared by people around the world

23. Psychographic Segmentation
MindBase finds shared patterns of behavior

24. Segmentation Profile Our customer is: Male who lives in the East
In an urban city of 1 million people
Young, married (ages 35-49) with a child
Annual income between $50,000 - $100,000
Is a college graduate who is a professional
Is white, upper lower class, ambitious
Sports minded and brand conscious

25. Business, Government, & Industry
Professional buyers
Concentrated geographically
Differences from Consumer Markets
Many purchase
decision factors
Small number of buyers
Categorized by NAICS code

26. Business, Government, & Industry

27. Market Concentration
Note the importance of the Midwest and California to manufacturing marketing

28. Aggregating Market Segments
Select Groups Interested in Public Utility
Whole market
Specific market
Combine Groups to Build Target Market Segments
Homogeneous
Profit Potential

29. Defining the Target Market

30. 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

31. Target Market Segments
Park Bench Seniors
New Empty Nest
Movers & Shakers
New Beginnings
Young Influentials
Bohemian Mix
Home Sweet Home

32. Q. 3. Define Product Concept.

33. Product Concept
Consumer’s perception of a product as a bundle of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs.

34. Q. 4. Explain the relationship between advertising and the Product element of the marketing mix.

35. Product Life Cycles

36. The Product Element Market Tangibility Consumption rate Buying habits
Physical description
Classification by…
Own a word
Market segment appeal
Benefits offered
Positioning
Classification
Differentiation

37. The Product Element
Volvo positions itself as owning safety

38. The Product Element
Perceptible
Induced
Hidden
Differentiation

39. Product Branding Goal is brand loyalty Individual Family National
Name
Individual
Family
National
Private
Licensed
Words
Design
Symbols

40. The Product Element
World’s most valuable brands
Insert ex. 6.14, p. 193
World’s most valuable brands
Position = 2.9” horizontal, 1.5” vertical
Size = 5.7” WIDE
Resolution = 300 dpi

41. The Most Valuable Brands

42. Containment, protection, convenience
Product Packaging
Identification
Consumer appeal
Containment, protection, convenience
Economy
These functions may become copy points

43. Q. 5. Explain the relationship between advertising and the Price element of the marketing mix.

44. The Price Element Price Factors: Demand
Production & distribution costs
Competition
Corporate goals & strategies
Variable influences

45. Q. 6. Explain the relationship between advertising and the Place element of the marketing mix.

46. The Place (Distribution) Element
Direct
Indirect
Vertical
Network
Intensive
Franchises
Selective
Buyer Club
Exclusive

47. Q. 7. Explain the relationship between advertising and the Promotion element of the marketing mix.

48. The Promotion Element Personal Selling Product Advertising
Communication Mix
Direct Marketing
Sales
Promotion
Public
Relations
Collateral
Materials

49. Hardees Commercial