Ch 3- Market Segmentation

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Consumer Behavior by Shiffman & Kanuk
Ch 3- Market segmentation

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  • 1. Copyright 2007 by Prentice HallConsumer Behavior,Ninth EditionSchiffman & KanukChapter 3Market SegmentationConsumer Behavior,Ninth Edition
  • 2. 3 - 2Chapter Outline• What Is Market Segmentation?• Bases for Segmentation• Criteria for Effective Targeting ofSegments• Implementing Segmentation Strategies
  • 3. 3 - 3Market SegmentationThe process of dividing apotential market intodistinct subsets ofconsumers and selectingone or more segments asa target market to bereached with a distinctmarketing mix.
  • 4. 3 - 4Three Phases of MarketingStrategyPhase 2Target Market and Marketing Mix SelectionPhase 3Product/Brand PositioningPhase 1Market Segmentation
  • 5. 3 - 5Segmentation Studies• Discover the needs and wants ofgroups of consumers to developspecialized products to satisfy groupneeds• Used to identify the most appropriatemedia for advertising
  • 6. 3 - 6Ryka producessneakers thatmeet the specialneeds ofwomen’s feet.
  • 7. 3 - 7Discussion Question• Considering the largest bank in yourcollege’s city or town:– How might consumers’ needs differ?– What types of products might meet theirneeds?– What advertising media makes sense forthe different segments of consumers?
  • 8. 3 - 8Bases for Segmentation• Geographic• Demographic• Psychological• Psychographic• Sociocultural• Use-Related• Usage-Situation• Benefit Sought• Hybrid
  • 9. 3 - 9Table 3.1 Market SegmentationOccupationSEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic SegmentationClimateDensity of areaCity SizeRegion Southwest, Mountain States, Alaska, HawaiiMajor metropolitan areas, small cities, townsUrban, suburban, exurban, ruralTemperate, hot, humid, rainyDemographic SegmentationIncomeMarital statusSexAge Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+Male, femaleSingle, married, divorced, living together, widowedUnder $25,000, $25,000-$34,999, $35,000-$49,999,$50,000-$74,999, $75,000-$99,999, $100,000 and overEducation Some high school, high school graduate, some college,college graduate, postgraduateProfessional, blue-collar, white-collar, agricultural,military
  • 10. 3 - 10Table 3.1, continuedSEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESPsychological SegmentationLearning-involvementPerceptionPersonalityNeeds-motivation Shelter, safety, security, affection, sense of self-worthExtroverts, novelty seeker, aggressives, innovatorsLow-risk, moderate-risk, high-riskLow-involvement, high-involvementPsychographicSubcultures (Race/ethnic)ReligionCultures(Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts,status seekersAmerican, Italian, Chinese, Mexican, French, PakistaniCatholic, Protestant, Jewish, Moslem, otherAfrican American, Caucasian, Asian, HispanicFamily life cycleSocial class Lower, middle, upperBachelors, young married, full nesters, empty nestersAttitudes Positive attitude, negative attitudeSociocultural Segmentation
  • 11. 3 - 11SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESUse-Related SegmentationBrand loyaltyAwareness statusUsage rate Heavy users, medium users, light users, non usersUnaware, aware, interested, enthusiasticNone, some, strongUse-Situation SegmentationLocationObjectiveTime Leisure, work, rush, morning, nightPersonal, gift, snack, fun, achievementHome, work, friend’s home, in-storePerson Self, family members, friends, boss, peersBenefit Segmentation Convenience, social acceptance, long lasting, economy,value-for-the-moneyPRIZM NEGeodemographics“Movers & Shakers,” “New Empty Nests,” “BoomtownSingles,” “Bedrock America”Demographic/PsychographicsCombination of demographic and psychographic profilesof consumer segments profilesSRI VALSTMInnovators, Thinkers, Believer, Achievers, Strivers,Experiencer, Makers, SurvivorsHybrid SegmentationTable 3.1, continued
  • 12. 3 - 12Geographic SegmentationThe division of a total potentialmarket into smaller subgroups onthe basis of geographic variables(e.g., region, state, or city)
  • 13. 3 - 13Demographic Segmentation• Age• Sex• Marital Status• Income, Education, and Occupation
  • 14. 3 - 14Web sites for SinglesLooking for a MatchMatch.com targets allsinglesThe Right Stufftargets only IvyLeague graduatesweblink weblink
  • 15. 3 - 15Psychological Segmentation• Motivations• Personality• Perceptions• Learning• AttitudesHarley-Davidson Video
  • 16. 3 - 16Two High-End Watches for DifferentPsychological Segments
  • 17. 3 - 17Psychographic Segmentation• Also known as Lifestyle Analysis• Psychographic variables includeattitudes, interests, and opinions(AIOs)
  • 18. 3 - 18Instructions: Please read each statement and place an “x” in the box that best indicates howstrongly you “agree” or “disagree” with the statement.I feel that my life is moving faster and faster,sometimes just too fast.If I could consider the “pluses” and “minuses,”technology has been good for me.I find that I have to pull myself away from e-mail.Given my lifestyle, I have more of a shortage oftime than money.I like the benefits of the Internet, but I often don’thave the time to take advantage of them.[1] [2] [3] [4] [5] [6] [7][1] [2] [3] [4] [5] [6] [7][1] [2] [3] [4] [5] [6] [7][1] [2] [3] [4] [5] [6] [7][1] [2] [3] [4] [5] [6] [7]AgreeCompletelyDisagreeCompletelyTable 3.6 Excerpts from AIO Inventory
  • 19. 3 - 19weblinkOpinionsand AttitudesADBUSTERSWeb site istargeted toconsumerswith a certainattitude towardadvertisers
  • 20. 3 - 20Sociocultural Segmentation• Family Life Cycle• Social Class• Culture, Subculture, and Cross-Culture
  • 21. 3 - 21Family Life Cycle AdvertisingVideo camerasare oftenpurchased byyoung coupleswith children.
  • 22. 3 - 22Target reachesout to theLatinomarket.
  • 23. 3 - 23Discussion Questions• What types of marketers mightsegment according to social class?• What ethical issues might marketershave when marketing to different socialclasses?
  • 24. 3 - 24Use-Related Segmentation• Rate of Usage– Heavy vs. Light• Awareness Status– Aware vs. Unaware• Brand Loyalty– Brand Loyal vs. Brand Switchers
  • 25. 3 - 25HighLowConsumptionHigh LowLoLows(starve)HiHighs(stroke)LowHighs(chase)HiLows(tickle)Segmenting Customers by UsageTable 3-8Current Share
  • 26. 3 - 26Usage-Situation Segmentation• Segmenting on the basis of specialoccasions or situations• Example Statements:– Whenever our daughter Jamie gets a raise,we always take her out to dinner.– When I’m away on business, I try to stay ata suites hotel.– I always buy my wife flowers onValentine’s Day.
  • 27. 3 - 27Benefit SegmentationSegmenting on the basis of the mostimportant and meaningful benefit
  • 28. 3 - 28Band-aidoffers “flex”as abenefit toconsumers.
  • 29. 3 - 29Hybrid SegmentationApproaches• Psychographic-Demographic Profiles• Geodemographic Segmentation• SRI Consulting’s VALS
  • 30. 3 - 30Selected Demographic Profile ofUSA Today Excerpt from Table 3-10USA TODAY USATODAY.COMUSA TODAYNETWORKMen 66% 70% 66%Women 34% 30% 34%Age 18-49 62% 73% 64%Age 25-54 65% 78% 67%Age 55+ 27% 18% 25%Average Age 45 43 45Attended collegeor beyond77% 83% 77%College graduateor beyond55% 65% 56%
  • 31. 3 - 31Selected Lifestyle Profile of USA TodayExcerpt from Table 3-11%CompIndexTech Savvy ReadersUse Internet more than once a day 32% 174Internet access at home 79% 128Online purchase for business or personal use in past30 days40% 182Household owns a PC 84% 119Owns digital camera 22% 130Leisure ActivitiesAttended movies in last 6 months 73% 120Bought music CD/tapes in last 12 months 46% 126Book reading 45% 120Entertain friends or relatives at home in last 12 months 48% 123Household subscribes to cable 69% 112
  • 32. 3 - 32VALS FrameworkFigure 3-7
  • 33. 3 - 33Discussion Question• How would you classifyyourself according toVALS? Your parents?• Do you think thisrepresents you as aconsumer?• If so, for what productsdoes this fit you as aconsumer?• Copy down the URLbelow to take the VALSsurvey tonight. See if youwere right in yourclassification…http://www.sric-bi.com/VALS/presurvey.shtmlweblink
  • 34. 3 - 34Criteria for Effective Targeting ofMarket Segments• Identification• Sufficiency• Stability• Accessibility
  • 35. 3 - 35Implementing SegmentationStrategies• Concentrated Marketing– One segment• Differentiated– Several segments with individualmarketing mizes