The Market Segmentation Process WTUC http://www.4cconsulting.com/uploadedImages/Management_consultancy/Intelligence_and_strategy/Segmentation.jpg

Importance of Market Segmentation in Advertising To find profitable market segments Scan marketplace and see what various consumer segments need and want and how they might be better satisfied http://attractionmarketing.com/images/ad-Verizon.jpg

To find profitable market segments

Scan marketplace and see what various consumer segments need and want and how they might be better satisfied

2-Step Strategy Identifying groups of people (or organizations) with certain shared needs and characteristics within the broad markets for consumer of business products Aggregating (combining) these groups into larger market segments according to their mutual interest ion the product’s utility.

Identifying groups of people (or organizations) with certain shared needs and characteristics within the broad markets for consumer of business products

Aggregating (combining) these groups into larger market segments according to their mutual interest ion the product’s utility.

Applying the Strategy Large market group Pool them together into one aggregate target market These people share the same interests in relation to your product’s utility

Pool them together into one aggregate target market

These people share the same interests in relation to your product’s utility

Target market- which lays the foundation for developing the proper mix of marketing activities-including advertising General Population of consumers http://www.intomartgfk.nl/images/bg_logo.gif

Markets consists of many segments A company differentiate products and marketing strategy for every segment Or simply concentrate on one segment

Markets consists of many segments

A company differentiate products and marketing strategy for every segment

Or simply concentrate on one segment

Types of Targets Marketing activities are aimed at a particular segment of the population Advertising is aimed at a particular group Target market Target audience

Marketing activities are aimed at a particular segment of the population

Advertising is aimed at a particular group

Types of Markets Companies use business advertising to reach people who buys good ad services for resale or for use in their own business or for manufacturing other products Also known as BTB Most advertising falls under consumer advertising Ad directed at consumers or people who buy the product for their own or someone else’s personal use Business Markets Consumer Markets

Companies use business advertising to reach people who buys good ad services for resale or for use in their own business or for manufacturing other products

Also known as BTB

Most advertising falls under consumer advertising

Ad directed at consumers or people who buy the product for their own or someone else’s personal use

Over half of all marketing is BTB Manufactured goods, raw materials, services for law firms, accountants, airlines, and advertising agencies Need more specialized product knowledge Advertising professionals must understand how people act and think, and why they buy what they buy Business Markets Consumer Markets

Over half of all marketing is BTB

Manufactured goods, raw materials, services for law firms, accountants, airlines, and advertising agencies

Need more specialized product knowledge

Advertising professionals must understand how people act and think, and why they buy what they buy

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Finding the Right Niche http://www.valicon.net/uploads/whowhatwhy_eng_popravki.gif

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Behavioristic Segmentation User status Usage rate Purchase occasion Benefits sought

User status

Usage rate

Purchase occasion

Benefits sought

User-Status Variables Sole users- most brand loyal, require least amount of advertising and promotion Semisole users- typically use Brand A but have an alternate selection if it is not available or if alternate is promoted with a discount Discount users- semisole users of competing Brand B. They don’t buy Brand A at full price Aware Nontriers- use competitive products in the category but haven’t taken a liking to Brand A. These people rarely offer potential Trial/Rejectors- bought Brand A’s advertising but didn’t like the product. Only reformulation of Brand A will bring them back Reportoire users- perceive two or more brands to have superior attributes and will buy at full price. Primary brand switchers and respond to persuasive advertising based on the fluctuating wants and desires

Sole users- most brand loyal, require least amount of advertising and promotion

Semisole users- typically use Brand A but have an alternate selection if it is not available or if alternate is promoted with a discount

Discount users- semisole users of competing Brand B. They don’t buy Brand A at full price

Aware Nontriers- use competitive products in the category but haven’t taken a liking to Brand A. These people rarely offer potential

Trial/Rejectors- bought Brand A’s advertising but didn’t like the product. Only reformulation of Brand A will bring them back

Reportoire users- perceive two or more brands to have superior attributes and will buy at full price. Primary brand switchers and respond to persuasive advertising based on the fluctuating wants and desires

Usage-Rate (Volume) Variables Light users Medium users Heavy users

Light users

Medium users

Heavy users

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Purchase-Occasion Variable Buyers are distinguished when they buy or use a product Air travelers- may fly for business or vacation Purchase- affected by frequency of need (regular/occasional), a fad (computer games), seasons (water skis, raincoats) Marketers who discovers common purchase occasions for a group has a potential target segment and can better determine when to run specials and when to promote certain product categories

Buyers are distinguished when they buy or use a product

Air travelers- may fly for business or vacation

Purchase- affected by frequency of need (regular/occasional), a fad (computer games), seasons (water skis, raincoats)

Marketers who discovers common purchase occasions for a group has a potential target segment and can better determine when to run specials and when to promote certain product categories

Benefit-Sought Variable Benefits High quality Low price Status Sex appeal Good taste Health conscious Symbolism- what the brand means to them or to their friends or some reference group Switching occurs in response to different needs

Benefits

High quality

Low price

Status

Sex appeal

Good taste

Health conscious

Symbolism- what the brand means to them or to their friends or some reference group

Switching occurs in response to different needs

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What’s the User Benefit here?

High-Quality Benefit

What’s the User Benefit here?

Low Price benefit

What’s the User Benefit here?

Status Benefit

What’s the User Benefit here?

Status Benefit

What’s the User Benefit here?

Sex Appeal Benefit

What’s the User Benefit here?

Good Taste Benefit

What’s the User Benefit here?

Health Conscious Benefit

What’s the User Benefit here?

Brand Symbol Benefit

Geographic Segmentation Region Country size City size Specific locations Types of stores

Region

Country size

City size

Specific locations

Types of stores

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Demographic Segmentation Sex Age Ethnicity Education Occupation Income And other quantifiable factors

Sex

Age

Ethnicity

Education

Occupation

Income

And other quantifiable factors

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Geodemographics Segmentation Demographics combined with geographic segmentation People’s lives are influenced by their environment and ethnicity

Demographics combined with geographic segmentation

People’s lives are influenced by their environment and ethnicity

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Psychographic Segmentation Emotional appeal Cultural values Attitudes Personality Lifestyle View people as individuals with feelings and inclinations

Emotional appeal

Cultural values

Attitudes

Personality

Lifestyle

View people as individuals with feelings and inclinations

http://www.media-studies.ca/articles/images/VALS.jpg Basic principles or values Tangible markers of success or accomplish-ments Desire for experiences or risk

Example: Company that markets high-end motorcycles A demographic profile might suggest that prospects are males between the ages of 30 and 50 A psychographic profile could extend the analysis by noting that the best prospects are experiences: Men motivated by self-expressive needs who also have sufficient resources to buy an expensive bike

A demographic profile might suggest that prospects are males between the ages of 30 and 50

A psychographic profile could extend the analysis by noting that the best prospects are experiences: Men motivated by self-expressive needs who also have sufficient resources to buy an expensive bike

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What’s the psychographic element here?

What’s the psychographic element here?

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Group discussion Hardee’s Thickburger Big, premium burgers

Hardee’s Thickburger

Big, premium burgers

Hardee’s Ad: Who’s the Target Market?

Hardee’s Thickburger Target Market Young male demographic ‘ real’ men Meets consumer taste expectations Trade on the notion of ‘male identity’ Paris doesn’t have anything to do with the burger Caused buzz among male demographic Spicyparis.com’s traffic shot so high that it crashed the server

Young male demographic

‘ real’ men

Meets consumer taste expectations

Trade on the notion of ‘male identity’

Paris doesn’t have anything to do with the burger

Caused buzz among male demographic

Another Hardee’s ad ‘ We could’ve shown you some cowboy, sitting around a campfire, eating a Western Bacon Thickburger…but who’d wanna see that?”

‘ We could’ve shown you some cowboy, sitting around a campfire, eating a Western Bacon Thickburger…but who’d wanna see that?”

Hardee’s pays careful attention to the benefits sought by the target demographic and tailors its offering accordingly Crafts advertising messages that will grab attention of the young male fast-food eaters

Hardee’s pays careful attention to the benefits sought by the target demographic and tailors its offering accordingly

Crafts advertising messages that will grab attention of the young male fast-food eaters

Assignment 1 due Week 5 Describe an ad that seems to be directed toward a specific target market segment. Define it using behavioristic, demographic, psychographic, and geographic variables. See page 91 to read Hardee’s ad example Print and submit on 3/16

Describe an ad that seems to be directed toward a specific target market segment. Define it using behavioristic, demographic, psychographic, and geographic variables.

See page 91 to read Hardee’s ad example

Print and submit on 3/16