Your SlideShare is downloading. ×
0
Chapter 7  Market Segmentation and Targeting Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga U...
After studying this chapter you should be able to: <ul><li>Define and explain market segmentation, target markets, and pro...
<ul><li>Describe the issues involved in product and brand positioning. </li></ul><ul><li>Understand the alternative bases ...
OPENING VIGNETTE <ul><li>WWW.SRIC-BI.COM   </li></ul><ul><li>What does the VALS topology accomplish? </li></ul><ul><li>Wha...
Focusing Marketing Strategy and  Evaluating Marketing Opportunities Opportunities to be turned Into marketing strategies a...
A Marketing Strategy – showing the 4 P’s of a Marketing Mix C Place Product Price Promotion
Overview of Marketing Strategy Planning Process External Market Environment Technologies  Political and Legal  Cultural an...
Strategy How to cope with a dynamic environment, capitalizing on opportunities and handling threats… How to adopt and inte...
MASS MARKET STRATEGY MULTISEGMENT STRATEGY CONCENTRATION STRATEGY MARKETING STRATEGY Organization’s Single Marketing Mix M...
Market Segmentation <ul><li>Market Segmentation: </li></ul><ul><ul><li>Divides a market into subsets of prospective custom...
Target Markets <ul><li>Targeting: </li></ul><ul><ul><li>Selecting which segments in a market  </li></ul></ul><ul><ul><li>a...
Narrowing down target markets Single target marketing approach Multiple target marketing approach Combined target marketin...
Product Differentiation <ul><li>Product Differentiation: </li></ul><ul><ul><li>Exists when a firm’s offerings differ or ar...
From Mass Marketing to Mass Customization <ul><li>Mass Customization: </li></ul><ul><ul><li>Complex manufactured products ...
Is Market Segmentation Appropriate? <ul><li>Frequently use approaches for a sustainable marketing strategy (company) </li>...
Value propositions 1. Business model 2. Core competencies Strategic intent Strategy IT Role? N Essentials for a Sustainabl...
Criteria for Effective Segmentation <ul><li>Five Criteria: </li></ul><ul><ul><li>Measurability </li></ul></ul><ul><ul><li>...
Stages in Developing Market Segmentation Strategies
Stages in Developing Market Segmentation Strategies Exhibit 7-2 Develop a market segmentation strategy  Define overall  pr...
Four Basic Types of Opportunities ©  2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing...
Market penetration Market development Diversification Product development Present products New products Present markets Ne...
Examples of Different Types of Opportunities  <ul><li>Market Penetration  </li></ul><ul><ul><li>Arm & Hammer promotes new ...
Bases for Segmentation <ul><li>Demographics </li></ul><ul><li>Geographics </li></ul><ul><li>Psychographics &  Lifestyles <...
Behavioral Geographics Demographics Psychographics Personality Lifestyle Age Gender Income Buying Power Expenditure patter...
Demographic Dimensions <ul><li>Important operational dimensions for understanding market segments and developing marketing...
Map of United States Showing Population by State (all figures in thousands)
Percent Change in Population by State
Changes in the U.S. Birthrate, 1935-2005
Age Distribution <ul><li>Average age is increasing </li></ul><ul><li>But there is a big teen cycle on the way </li></ul><u...
MyGeneration ad
Population Distribution (and Percent Growth Rate) by Age Groups for Different 10-Year Periods)
Median Family Income Over Time (in 1999 dollars)
Percent of Total Income Going to Different Income Groups in 1999
Income Distribution <ul><li>Growth in real income has slowed down </li></ul><ul><li>Middle income groups in U.S. enjoy rea...
Types of Income <ul><li>DISPOSABLE INCOME </li></ul><ul><ul><li>Income that is left after taxes </li></ul></ul><ul><li>DIS...
Age Age of children In the household Marital status FAMILY LIFE CYCLE FACTORS Family cycle factors
Middle-age divorced without children Middle-age married without children Middle-age married  with children Middle-age divo...
Psychological (intra-personal) Variables <ul><li>Motivation </li></ul><ul><li>Perception </li></ul><ul><li>Learning </li><...
Possible Needs Motivating a Person to  Some Action
CONSUMER LIFESTYLES Interests Opinions Activities PSYCHOGRAPHICS Psychographics
Lifestyle Dimensions (and some related demographic dimensions)
Six Betty Crocker pictures, 1936-2000 (The original Betty, 1936) (1965) (1972) (Betty Crocker 2000) (1980) (1986)
Social (intra-personal) Influences on Consumers ©  2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with B...
Characteristics and Attitudes of Middle and Lower Classes ©  2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use o...
Exhibit 7-5 A two stage segmentation example  Combining Bases of Market Segmentation Stage 1 Initial segmentation Stage 2 ...
MASS MARKET STRATEGY MULTISEGMENT STRATEGY CONCENTRATION STRATEGY MARKETING STRATEGY Organization’s Single Marketing Mix M...
PORTER’S FIVE COMPETITIVE FORCES  MODEL Threats Bargaining power N Internal Forces 1.customer focus 2.communication 3.core...
Porter’s Generic Strategy Framework –  3 Strategies for achieving Competitive Advantage Competitive Mechanism Overall Cost...
Segmentation Strategies Undifferentiated Strategy Differentiated Strategy Concentrated Strategy
Countersegmentation Strategy <ul><li>Countersegmentation:  </li></ul><ul><ul><li>An alternative strategy to traditional se...
Factors Influencing Segmentation Strategy <ul><li>Size and type of the market  </li></ul><ul><li>Competitive factors </li>...
Estimating Segment Potentials <ul><li>Set time period of interest. </li></ul><ul><li>Define product level. </li></ul><ul><...
Firm and Market Potentials and Forecasts Industry Level Firm Level Best Possible Results Expected Results for Given Strate...
Developing Forecasts <ul><li>Qualitative  Procedures: </li></ul><ul><ul><li>Survey of Buyers’ Intentions </li></ul></ul><u...
Targeting Market Segments <ul><li>To select target segments, the firm must consider: </li></ul><ul><ul><li>The segment’s p...
Cost Leadership Business Strategies  and its  Competitive Advantage Cost Focus Differentiation Differentiation Focus Indus...
Positioning <ul><li>Repositioning: </li></ul><ul><ul><li>When a firm wants to shift consumer  </li></ul></ul><ul><ul><li>o...
Perceptual Maps <ul><li>Perceptual Maps: </li></ul><ul><ul><li>Spatial representations of consumer perceptions of products...
Generic market definition Product- market definition Customer (user) needs Customer types Geographical area Product type (...
Micromarketing <ul><li>Micromarketing: </li></ul><ul><ul><li>Combines  Census   and  </li></ul></ul><ul><ul><li>Demographi...
Micromarketing <ul><li>Enhances the effectiveness of marketing efforts by: </li></ul><ul><ul><li>Identifying potential mar...
Market Segmentation and Ethics <ul><ul><li>Advertising to Children </li></ul></ul><ul><ul><li>Harmful Products  </li></ul>...
Upcoming SlideShare
Loading in...5
×

ch7,

1,911

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,911
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
80
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • Summary Overview In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • Q: ask students how to sell (promote) a new product. Then try to direct the answers cover this 4P’s Summary Overview (Exhibit 2-8) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility  provided when someone produces something tangible. Task utility  provided when someone performs a task for someone else. Time utility  having the product available when the customer wants it. Place utility  having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it.
  • Summary Overview (P;Exhibit 3-1) In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • Q/A (p.150) Discuss a single standardized global strategy vs. Customized marketing strategy Standardized global strategy – can cause a firm to miss important target markets or to position products inappropriately Customized marketing strategy – only to individual countries may result in a firm’s losing either potential economies of scale or opportunities for exploiting product ideas on a wider scale.
  • Market segmentation lets a firm tailor or develop products and strategies to appeal to the preferences and unique needs of specific groups of customers. These groups are typically referred to as a target markets: groups of consumers or organizations with whom a firm wants to create marketing exchanges. A firm should target only those markets it can effectively reach and serve . (core competency) Segmentation may be appropriate for businesses of all sizes, not just for large firms with many products. -- it is better to gain a large share of one segment or a few, rather than small shares of all possible segment in a product.
  • Exhibit 3-3 of P;
  • A product differentiation strategy positions a product within the market.
  • p.153
  • Business model is a means (way)of creating business value. -- In order to be successful and prosperous for a company, it should have a suitable, profitable model within its industry and business. Business landscape is the relationships (pos. and negative) among the members of value chain and/or value net. Strategic intent is the “future positioning” of an enterprise Differentiation (BPR, Benchmarking, Best Practices): KSF -  K_Survival_F -  Strategic convergence -  KSF -- competitive advantage, sustainability, imitability Competitive posture : collaboration or competition based on 产业特性 , 市场的增长率,需求特性,进入障碍,等
  • p.153 In determining strategies to pursue, marketers should judge potential segments against five criteria: Measurability – the degree to which the size and purchasing power of segments can be assessed. (demographic) Accessibility – the degree to which a firm can reach intended target segments efficiently. Substantialness – the degree to which identified target segments are large enough or have sufficient sales and profit potential to warrant unique or separate marketing programs. Durability – stability of segments Differential Responsiveness – refers to the extent to which market segments exhibit different responses to different marketing mixes.
  • The organizational core business determines the product or service market in which it operates. Bases of segmentation – distinguishing characteristics
  • Summary Overview (P; E3-2) In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers. This slide relates to material on pp. 10-11.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview (P; E3-2) In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • (We discuss the segmentations based on the first three) Benefit Segmentation – with the provision of customer value and the marketing concept. -- to be customer-oriented and to provide consumer benefits to generate long-term customer satifaction Economic segmentation – behavioral based, eg., low revenue/low profit customers will received minimum services. Value-base International Segmentation -
  • Summary Overview ( Exhibit 5-2) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview ( Exhibit 5-3) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview ( Exhibit 5-4) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview (Exhibit 5-5) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview (Exhibit 5-6) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview (Exhibit 5-7) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview (Exhibit 5-8 Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview (P;) In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • Summary Overview (P; Exhibit 5-9) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility  provided when someone produces something tangible. Task utility  provided when someone performs a task for someone else. Time utility  having the product available when the customer wants it. Place utility  having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview (Exhibit 6-2 of P) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • Summary Overview (Exhibit 6-5) Production and marketing work together to create utility : the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility : provided when someone produces something tangible. Task utility : provided when someone performs a task for someone else. Time utility : having the product available when the customer wants it. Place utility : having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility : obtaining a good or service and the right to use or consume it. This slide relates to material on pp. 5-6.  Indicates place where slide “builds” to include the corresponding point.     
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • Summary Overview Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms. Key Issues The United States Postal Service is promoting its services: to firms that are trying to target personalized communications; to help develop closer customer relationships. Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? This slide relates to material on p. 42.
  • According to Porter, there are five competitive forces in any industry, and the attractiveness of the industry depends on the strength of each force (Porter, 1985). Under the perspective of market structure, Porter’s competitive forces model (Porter, 1985; Applegate et al ., 1999) has been broadly adopted as the underpinning for investigating the effect of information technology on the relationships between suppliers, customers, and other potential threats. Contemporary strategic planning frameworks -- 1) too narrow and pessimistic -- 2) they are based on projections of market share and market growth COMPETITIVE FORCES that SHAPE strategy -- depends on the type of the industry The ability to manage complexity and responsiveness has become a powerful source of competitive advantage. Internal Forces 1.customer focus 2.communication 3.core competencies 4.complexity 5.quality
  • Three generic strategies Cost leadership differentiation (internal differentiation [e.g., stock option, bonus, salary increase] is good for building performance culture within the organization) Focus (focused strategy is to develop a new market niches for specialized products/services where a target area better than its competitors) -- means an appropriate position/market a. cost b. differentiation Core concept of this strategy are two basic principles: 1. Competitive advantage is believed to be the GOAL of any strategy 2. It is to be believed that a firm must define the TYPE of CA it seeks to attain and the scope within which it will be attained. From “all things to all people” (a below-average performance) to a focus on core competencies .
  • These strategies provide firms alternative methods for enhancing the execution of their marketing programs. Criteria: If consumers are not particularly sensitive to product differences, and undifferentiated strategy may be appropriate. But, if the firm sells to an overall product market with many different segments, a differentiated or concentrated approach is the better choice.
  • These strategies provide firms alternative methods for enhancing the execution of their marketing programs. Criteria: If consumers are not particularly sensitive to product differences, and undifferentiated strategy may be appropriate. But, if the firm sells to an overall product market with many different segments, a differentiated or concentrated approach is the better choice. Product-related factors: -- If the product is new, a concentrated segmentation strategy may be best (only one product or a few) -- In the later stages of a product’s life, large firms tend to pursue a differentiated segmentation strategy. If a firm has many competitors, its best strategy may be to concentrate on developing strong brand loyalty and buyer preferences in one target segment or perhaps a few.
  • Market potential is the maximum amount of industry sales possible for a product or service for a specific period Market forecast for the same period is a function of the amount of marketing effort (expenditures) put forth by all companies competing in that market. Sales potential is the maximum amount of sales firm can obtain for a specified time period. To produce a sales forecast , a company should screen out market segments that represent insufficient potential sales and analyze further the remaining segments. With three areas: 1) Competitive activity; 2) Availability of channels of distribution and, 3) Marketing media What brands are already in the market? What are the strengths and weaknesses of the competition? What distribution outlets and supporting channels of distribution are available? What is the cost of access to the appropriate media?
  • Market potential is the maximum amount of industry sales possible for a product or service for a specific period Market forecast for the same period is a function of the amount of marketing effort (expenditures) put forth by all companies competing in that market. Sales potential is the maximum amount of sales firm can obtain for a specified time period. To produce a sales forecast , a company should screen out market segments that represent insufficient potential sales and analyze further the remaining segments. With three areas: 1) Competitive activity; 2) Availability of channels of distribution and, 3) Marketing media What brands are already in the market? What are the strengths and weaknesses of the competition? What distribution outlets and supporting channels of distribution are available? What is the cost of access to the appropriate media?
  • Forecasts represent the amount the company expects to sell in a market over a specific time period. Forecasts are used to evaluate opportunities, budget marketing efforts, control expenditures, and assess subsequent sales performance. High forecasts can lead to excessive investment and expenditures, whereas low F can result in lost opportunities. Qualitative – employ judgmental opinion and insight Quantitative – historical data to make trend extensions or numerical estimates of forecasted sales.
  • (p.168) Accurate identification of the marketing segments appropriate for a particular product is critical if firms are to target those segments efficiently. Technology brings new precision to both 1) the selection of specific target segments and 2) the ability to each them. The segment’s potential sales volume and profits. -- large segments with a substantial number of buyers seem to promise high potential sales volume and profits, smaller segments served by a unique marketing mix may also provide lucrative business opportunities. Competition currently selling to the segments. -- if the firm has a competitive advantage that cannot be easily copied, it may attempt to approach the larger market segments The firm’s abilities and objectives. -- a firm specializing in innovative technological products may compete on total value, rather than on price along, focusing on one segment or a few segments where high-quality, innovative products appeal.
  • Three generic strategies Cost leadership differentiation (internal differentiation is good for building performance culture within the organization) Focus (focused strategy is to develop a new market niches for specialized products/services where a target area better than its competitors) -- means an appropriate position/market a. cost b. differentiation Core concept of this strategy are two basic principles: 1. Competitive advantage is believed to be the GOAL of any strategy 2. It is to be believed that a firm must define the TYPE of CA it seeks to attain and the scope within which it will be attained. From “all things to all people” (a below-average performance) to a focus on core competencies .
  • Product attributes, price, and image enhancements are major components in positioning. Once segments have been selected and targeted, the firm must position its products and services in the minds of its customers. Positioning – a product or service involves d esigning a marketing program, including the product mix, that is consistent with how the company wants its products or services to be perceived. Positioning aims to influence or adjust customer perceptions of a product or brand. Positioning involves 1) the selection of target segments and 2) the formulation of product attributes that make up the brand. Repositioning - When a firm wants to shift consumer opinions about an existing brand, requires development of new marketing programs. For example, Snackwell’s successfully halted dramatically falling sales volume by repositioning itself.) Repositioning may include: product reformulation, an increased marketing budget, and a drastic shift in advertising redirected toward the brand’s new core audience – women or others.
  • Product attributes, price, and image enhancements are major components in positioning. Perceptual maps often show positions for competitors’ brands. By combining segmentation and positioning research, a company can learn which segments are attractive and how consumers in specific segments perceive the company’s products relative to competing products and brands. Exhibit 7-10 is a perceptual map according to consumer perceptions of price and brand expressiveness. Note that over time, a brand’s market position can shift.
  • Summary Overview ( Exhibit 3-4 of P;) In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works . Key Issues Every economy needs a macro-marketing system, because: every consumer has a different set of needs; variation exists among the types of producers that can meet needs; system must efficiently match consumers and producers. Macro marketing systems should be effective and fair, based on the perceptions of people in that particular economy. Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.
  • PRIZM Demographic descriptions of county, zip code, and census tract locations combined with information about area values, preferences, and purchasing habits enable companies to pinpoint likely or desired customers. Firms use micromarketing to increase the productivity of their marketing expenditures.
  • PRIZM Demographic descriptions of county, zip code, and census tract locations combined with information about area values, preferences, and purchasing habits enable companies to pinpoint likely or desired customers. Firms use micromarketing to increase the productivity of their marketing expenditures.
  • Targeting selected market segments can provide substantial benefits to both marketers and consumers: The marketer gains sales and 2) the consumers receive the particular products and services they most want and value. Yet, segmentation practices can be so effective that they are fraught with opportunities for exploitation. Marketers must consider the ethical issues associated with some segmentation and targeting practices. Advertising to Children – a large and influential market segment, can stimulate demand for expensive and unnecessary products. Harmful Products – cigarettes and alcohol to young people and women (Virginia Slims) raises important ethical issues Privacy Issues - to target precise consumer segments concerns about privacy arise, e.g., consumer purchase histories, credit histories, and telephone number can be combined for use in developing and targeting direct marketing campaigns. Product Proliferation – over 30 food products are introduced every day.
  • Transcript of "ch7,"

    1. 1. Chapter 7 Market Segmentation and Targeting Professor Jason C. H. Chen, Ph.D. School of Business Administration Gonzaga University Spokane, WA 99223 [email_address]
    2. 2. After studying this chapter you should be able to: <ul><li>Define and explain market segmentation, target markets, and product differentiation and positioning. </li></ul><ul><li>Understand the criteria used for evaluating the likely success of a segmentation strategy. </li></ul><ul><li>Know the role of market segmentation in the development of marketing strategies and programs. </li></ul>
    3. 3. <ul><li>Describe the issues involved in product and brand positioning. </li></ul><ul><li>Understand the alternative bases for segmenting consumer and business-to-business markets. </li></ul><ul><li>Evaluate alternative approaches for pursuing segmentation strategies. </li></ul>After studying this chapter you should be able to:
    4. 4. OPENING VIGNETTE <ul><li>WWW.SRIC-BI.COM </li></ul><ul><li>What does the VALS topology accomplish? </li></ul><ul><li>What does new service does VALS offer? </li></ul>Two Cases for this chapter (Making Marketing Decisions ): Case 7-1 : PRIZM by Claritas: You Are Where You Live Case 7-2 : Marriott International: “Suite Deals”
    5. 5. Focusing Marketing Strategy and Evaluating Marketing Opportunities Opportunities to be turned Into marketing strategies and plans Develop product market Screening criteria Focusing marketing Strategy S.W.O.T Analysis Defining generic markets and product-markets Targeting and Segmentation Positioning and Differentiation Company mission, objectives, resources Competitor analysis Trends in external environment: Technological, Economic, Political & Legal Cultural & Social Evaluating Opportunities
    6. 6. A Marketing Strategy – showing the 4 P’s of a Marketing Mix C Place Product Price Promotion
    7. 7. Overview of Marketing Strategy Planning Process External Market Environment Technologies Political and Legal Cultural and Social Economic Narrowing down to focused strategy with quantitative and qualitative screening criteria Customers Needs and other Segmenting Dimensions Company Objectives & Resources Competitors Current & Prospective Segmentation & Positioning Segmentation & Targeting S. W. O. T. Place Product Price Promotion C
    8. 8. Strategy How to cope with a dynamic environment, capitalizing on opportunities and handling threats… How to adopt and integrated systems orientation… How to be a market driven organization = STRATEGIC PLANNING Mission Statement (Marketing Concept Orientation) Objectives and Goals Grand Strategy Marketing Strategy and Tactics Target Market (Segments, Position) Marketing Mix P P P P Offering to the Market Impact of Competition and other Environmental Items Company-Wide Level Feedback of Results
    9. 9. MASS MARKET STRATEGY MULTISEGMENT STRATEGY CONCENTRATION STRATEGY MARKETING STRATEGY Organization’s Single Marketing Mix Mass Market Organization’s Single Marketing Mix Segment A B C D E Organization’s Several Marketing Mixes A D F Segment Segment Segment A B C D E F
    10. 10. Market Segmentation <ul><li>Market Segmentation: </li></ul><ul><ul><li>Divides a market into subsets of prospective customers who behave in the same way, have similar wants, or have similar characteristics that relate to purchase. </li></ul></ul><ul><li>Intermarket Segments: </li></ul><ul><ul><li>Well-defined, similar clusters of customers across national boundaries. </li></ul></ul>
    11. 11. Target Markets <ul><li>Targeting: </li></ul><ul><ul><li>Selecting which segments in a market </li></ul></ul><ul><ul><li>are appropriate to focus on and </li></ul></ul><ul><ul><li>designing the means of reaching them. </li></ul></ul>
    12. 12. Narrowing down target markets Single target marketing approach Multiple target marketing approach Combined target marketing approach All customer needs Some generic market One broad- product market Homogenous (narrow) product- markets Select target marketing approach Segmenting into possible target markets Narrowing down to specific product-market
    13. 13. Product Differentiation <ul><li>Product Differentiation: </li></ul><ul><ul><li>Exists when a firm’s offerings differ or are perceived to differ from those of competing firms on any attribute, including price. </li></ul></ul>
    14. 14. From Mass Marketing to Mass Customization <ul><li>Mass Customization: </li></ul><ul><ul><li>Complex manufactured products made to order. </li></ul></ul>
    15. 15. Is Market Segmentation Appropriate? <ul><li>Frequently use approaches for a sustainable marketing strategy (company) </li></ul><ul><ul><li>Developing brand-line extensions </li></ul></ul><ul><ul><li>Repositioning the product for additional uses </li></ul></ul><ul><ul><li>Identifying the needs of a particular segment, or segments </li></ul></ul><ul><ul><li>Developing marketing strategies for each </li></ul></ul><ul><li>When the segmentation strategy is not useful </li></ul><ul><ul><li>When the overall market is so small that marketing to a portion of it is not profitable </li></ul></ul><ul><ul><li>When the brand is dominant in the market and draws its appeal from all segments </li></ul></ul>
    16. 16. Value propositions 1. Business model 2. Core competencies Strategic intent Strategy IT Role? N Essentials for a Sustainable Enterprise Positioning 3. Execution competition structure/ culture Finance Management Process H/R Technology … <ul><li>Positioning on product/market </li></ul><ul><li>Differentiation/choice of competitive advantage </li></ul><ul><li>Competitive posture </li></ul><ul><li>Industry characteristics , </li></ul><ul><li>Market growth , </li></ul><ul><li>Demand characteristics , </li></ul><ul><li>Barrier of entry , etc. </li></ul>fulfill Consistent Analysis (Porter, SWOT ) Corporate strategy Business strategy Functional strategy Business landscape Internal/ External future positioning
    17. 17. Criteria for Effective Segmentation <ul><li>Five Criteria: </li></ul><ul><ul><li>Measurability </li></ul></ul><ul><ul><li>Accessibility </li></ul></ul><ul><ul><li>Substantialness </li></ul></ul><ul><ul><li>Durability </li></ul></ul><ul><ul><li>Differential Responsiveness </li></ul></ul>
    18. 18. Stages in Developing Market Segmentation Strategies
    19. 19. Stages in Developing Market Segmentation Strategies Exhibit 7-2 Develop a market segmentation strategy Define overall product market in which company operates Identify distinguishing characteristics of segments or bases for segmentation Describe segments Evaluate approaches for potential & likely success Select target market Determine desired positioning and then develop marketing mix to achieve desired position 1 2 3 4 5 6
    20. 20. Four Basic Types of Opportunities © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing Exhibit 3-2
    21. 21. Market penetration Market development Diversification Product development Present products New products Present markets New markets Four Basic Types of Opportunities
    22. 22. Examples of Different Types of Opportunities <ul><li>Market Penetration </li></ul><ul><ul><li>Arm & Hammer promotes new uses of its baking soda </li></ul></ul><ul><li>Market Development </li></ul><ul><ul><li>Marriott Hotels target families for weekend &quot;get-aways&quot; to rent rooms filled by business travelers during the week </li></ul></ul><ul><li>Product Development </li></ul><ul><ul><li>Microsoft develops a new version of its Windows operating system to appeal to the people who bought an earlier version but now want more features </li></ul></ul><ul><li>Diversification </li></ul><ul><ul><li>RJR, the cigarette producer, adds baked goods to its product line to appeal to new customers </li></ul></ul>
    23. 23. Bases for Segmentation <ul><li>Demographics </li></ul><ul><li>Geographics </li></ul><ul><li>Psychographics & Lifestyles </li></ul><ul><li>Benefit Segmentation </li></ul><ul><li>Economic Segmentation </li></ul><ul><li>International Segmentation </li></ul>
    24. 24. Behavioral Geographics Demographics Psychographics Personality Lifestyle Age Gender Income Buying Power Expenditure patterns Occupation Education Race or nationality Family life cycle Social class Decisions Amount of usage Type of usage Brand loyalty Benefits sought Nation/Region State/Region City/Neighborhood Climate/Terrain Population density Market density Segmentation Variables Potential Consumer Segments
    25. 25. Demographic Dimensions <ul><li>Important operational dimensions for understanding market segments and developing marketing mixes </li></ul><ul><ul><li>Much good data is available </li></ul></ul><ul><li>Important for determining size of consumer target markets </li></ul><ul><ul><li>Is the market substantial? </li></ul></ul><ul><li>Seeing demographic trends helps identify opportunities </li></ul><ul><ul><li>Shifts in age distribution </li></ul></ul><ul><ul><li>Geographic growth/decline </li></ul></ul>
    26. 26. Map of United States Showing Population by State (all figures in thousands)
    27. 27. Percent Change in Population by State
    28. 28. Changes in the U.S. Birthrate, 1935-2005
    29. 29. Age Distribution <ul><li>Average age is increasing </li></ul><ul><li>But there is a big teen cycle on the way </li></ul><ul><li>Post World War II &quot;Baby Boomers“ </li></ul><ul><ul><li>Still a big, influential group </li></ul></ul><ul><li>50 and older group to grow dramatically in next decade </li></ul>
    30. 30. MyGeneration ad
    31. 31. Population Distribution (and Percent Growth Rate) by Age Groups for Different 10-Year Periods)
    32. 32. Median Family Income Over Time (in 1999 dollars)
    33. 33. Percent of Total Income Going to Different Income Groups in 1999
    34. 34. Income Distribution <ul><li>Growth in real income has slowed down </li></ul><ul><li>Middle income groups in U.S. enjoy real choices </li></ul><ul><ul><li>U.S. distribution like Canada, Western Europe, Japan, Australia, New Zealand </li></ul></ul><ul><li>Higher income groups still have much of the spending power </li></ul><ul><ul><li>Top 20% income group has over 47 percent of total income! </li></ul></ul><ul><ul><li>Bottom 20% income group has only about 4 percent! </li></ul></ul>
    35. 35. Types of Income <ul><li>DISPOSABLE INCOME </li></ul><ul><ul><li>Income that is left after taxes </li></ul></ul><ul><li>DISCRETIONARY INCOME </li></ul><ul><ul><li>What is left of disposable income after paying for &quot;necessities&quot; </li></ul></ul>
    36. 36. Age Age of children In the household Marital status FAMILY LIFE CYCLE FACTORS Family cycle factors
    37. 37. Middle-age divorced without children Middle-age married without children Middle-age married with children Middle-age divorced with children Middle-age divorced without dependent children Middle-age divorced without children Young married with children * Young married without children * Young single * Middle-age married without dependent children Older Married * Older Unmarried * Young divorced without children * Usual flow Recycled flow * Tradition family flow Stages in Modern Family Life Cycles
    38. 38. Psychological (intra-personal) Variables <ul><li>Motivation </li></ul><ul><li>Perception </li></ul><ul><li>Learning </li></ul><ul><li>Attitudes and beliefs </li></ul><ul><li>Personality </li></ul><ul><li>Lifestyle (psychographics) </li></ul>
    39. 39. Possible Needs Motivating a Person to Some Action
    40. 40. CONSUMER LIFESTYLES Interests Opinions Activities PSYCHOGRAPHICS Psychographics
    41. 41. Lifestyle Dimensions (and some related demographic dimensions)
    42. 42. Six Betty Crocker pictures, 1936-2000 (The original Betty, 1936) (1965) (1972) (Betty Crocker 2000) (1980) (1986)
    43. 43. Social (intra-personal) Influences on Consumers © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing <ul><li>Family </li></ul><ul><li>Reference groups </li></ul><ul><li>Social class </li></ul><ul><li>Culture and subculture </li></ul>
    44. 44. Characteristics and Attitudes of Middle and Lower Classes © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing <ul><li>Middle classes </li></ul><ul><ul><li>Plan and save for the future </li></ul></ul><ul><ul><li>Analyze alternatives </li></ul></ul><ul><ul><li>Understand how the world works </li></ul></ul><ul><ul><li>Feel they have opportunities </li></ul></ul><ul><ul><li>Willing to take risks </li></ul></ul><ul><ul><li>Confident about decision making </li></ul></ul><ul><ul><li>Want long-run quality or value </li></ul></ul><ul><li>Lower classes </li></ul><ul><ul><li>Live for the present </li></ul></ul><ul><ul><li>&quot;Feel&quot; what is &quot;best&quot; </li></ul></ul><ul><ul><li>Have simplistic ideas about how things work </li></ul></ul><ul><ul><li>Feel controlled by the world </li></ul></ul><ul><ul><li>&quot;Play it safe&quot; </li></ul></ul><ul><ul><li>Want help with decision making </li></ul></ul><ul><ul><li>Want short-run satisfaction </li></ul></ul>
    45. 45. Exhibit 7-5 A two stage segmentation example Combining Bases of Market Segmentation Stage 1 Initial segmentation Stage 2 Supplemental segmentation descriptors Managerial decisions Usage: Heavy vs. Light Demographics: Income & Education Lifestyles Advertising Content (conservative, youthful, appeals, & messages) Media Selection (magazines & TV programs)
    46. 46. MASS MARKET STRATEGY MULTISEGMENT STRATEGY CONCENTRATION STRATEGY MARKETING STRATEGY Organization’s Single Marketing Mix Mass Market Organization’s Single Marketing Mix Segment A B C D E Organization’s Several Marketing Mixes A D F Segment Segment Segment A B C D E F
    47. 47. PORTER’S FIVE COMPETITIVE FORCES MODEL Threats Bargaining power N Internal Forces 1.customer focus 2.communication 3.core competencies 4.complexity 5.quality THE FIRM TRADITIONAL COMPETITORS NEW MARKET ENTRANTS SUPPLIERS SUBSTITUTE PRODUCTS & SERVICES CUSTOMERS
    48. 48. Porter’s Generic Strategy Framework – 3 Strategies for achieving Competitive Advantage Competitive Mechanism Overall Cost Leadership Focus Differentiation Industrywide (Broad Target) Particular Segment only (Narrow Target) Competitive Scope Lower Cost Position Uniqueness Perceived by Customer N
    49. 49. Segmentation Strategies Undifferentiated Strategy Differentiated Strategy Concentrated Strategy
    50. 50. Countersegmentation Strategy <ul><li>Countersegmentation: </li></ul><ul><ul><li>An alternative strategy to traditional segmentation approaches. </li></ul></ul><ul><ul><ul><li>Combines market segments </li></ul></ul></ul><ul><ul><ul><li>Consumers accept lower price over variety </li></ul></ul></ul>
    51. 51. Factors Influencing Segmentation Strategy <ul><li>Size and type of the market </li></ul><ul><li>Competitive factors </li></ul><ul><li>Product-related factors: </li></ul><ul><ul><li>Stage in the product life cycle. </li></ul></ul><ul><ul><li>Degree to which the product may be varied or modified. </li></ul></ul><ul><li>Firm’s size and financial position </li></ul>
    52. 52. Estimating Segment Potentials <ul><li>Set time period of interest. </li></ul><ul><li>Define product level. </li></ul><ul><li>Specify segment characteristics or bases. </li></ul><ul><li>Identify geographic market boundaries. </li></ul><ul><li>Make assumptions about the marketing environment. </li></ul><ul><li>Make assumptions about company’s own marketing efforts and programs (controllable factors). </li></ul><ul><li>Make estimates of market potential, industry sales, and company sales. </li></ul>
    53. 53. Firm and Market Potentials and Forecasts Industry Level Firm Level Best Possible Results Expected Results for Given Strategy Market Potential Market Forecast Sales Potential Sales Forecast
    54. 54. Developing Forecasts <ul><li>Qualitative Procedures: </li></ul><ul><ul><li>Survey of Buyers’ Intentions </li></ul></ul><ul><ul><li>Expert Opinion </li></ul></ul><ul><ul><li>Composite of Salesforce Estimates </li></ul></ul><ul><li>Quantitative Methods: </li></ul><ul><ul><li>Trend Analysis </li></ul></ul><ul><ul><li>Market Tests </li></ul></ul><ul><ul><li>Statistical Demand Analysis </li></ul></ul>
    55. 55. Targeting Market Segments <ul><li>To select target segments, the firm must consider: </li></ul><ul><ul><li>The segment’s potential sales volume and profits. </li></ul></ul><ul><ul><li>Competition currently selling to the segments. </li></ul></ul><ul><ul><li>The firm’s abilities and objectives. </li></ul></ul>
    56. 56. Cost Leadership Business Strategies and its Competitive Advantage Cost Focus Differentiation Differentiation Focus Industrywide (Broad Target) Particular Segment only (Narrow Target) Competitive Scope Competitive Mechanism Lower Cost Position Uniqueness Perceived by Customer Industrial economy Knowledge-based economy Innovation Alliance Growth
    57. 57. Positioning <ul><li>Repositioning: </li></ul><ul><ul><li>When a firm wants to shift consumer </li></ul></ul><ul><ul><li>opinions about an existing brand. </li></ul></ul><ul><li>Positioning: </li></ul><ul><ul><li>Designing a marketing program, including </li></ul></ul><ul><ul><li>the product mix, that is consistent with how </li></ul></ul><ul><ul><li>the company wants its products or </li></ul></ul><ul><ul><li>services to be perceived. </li></ul></ul>
    58. 58. Perceptual Maps <ul><li>Perceptual Maps: </li></ul><ul><ul><li>Spatial representations of consumer perceptions of products or brands, are often used to evaluate brand positions in a market. </li></ul></ul><ul><li>Diet Pepsi </li></ul><ul><li>Pepsi Cola </li></ul><ul><li>RC Cola </li></ul><ul><li>Dr Pepper </li></ul><ul><li>Diet Sprite </li></ul><ul><li>Diet 7-Up </li></ul><ul><li>7-Up </li></ul><ul><li>Sprite </li></ul><ul><li>Orange Crush </li></ul><ul><li>Coke Classic </li></ul>Conservative Expressive High price Low price
    59. 59. Generic market definition Product- market definition Customer (user) needs Customer types Geographical area Product type (good and/or service) Relationship between Generic and Product-Market Definitions
    60. 60. Micromarketing <ul><li>Micromarketing: </li></ul><ul><ul><li>Combines Census and </li></ul></ul><ul><ul><li>Demographic data to identify </li></ul></ul><ul><ul><li>clusters of households </li></ul></ul><ul><ul><li>that share similar </li></ul></ul><ul><ul><li>consumption patterns. </li></ul></ul>
    61. 61. Micromarketing <ul><li>Enhances the effectiveness of marketing efforts by: </li></ul><ul><ul><li>Identifying potential markets for direct selling through mail and telemarketing campaigns. </li></ul></ul><ul><ul><li>Profiling customers by matching them to demographic and lifestyle clusters. </li></ul></ul><ul><ul><li>Learning which areas offer the greatest potential in site selection for new stores or offices. </li></ul></ul><ul><ul><li>Tailoring advertising themes and planning media. </li></ul></ul>
    62. 62. Market Segmentation and Ethics <ul><ul><li>Advertising to Children </li></ul></ul><ul><ul><li>Harmful Products </li></ul></ul><ul><ul><li>Privacy Issues </li></ul></ul><ul><ul><li>Product Proliferation </li></ul></ul>
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×