This ad for Bijan highlights the fact that not all women are alike. So in marketing to females, a company will need more information. That is where some of the other segmentation variables come into play.
Through in-depth interviews and focus group research, BMW Motorcycles learned a great deal about differences between men and women when it came to motorcycles. Men were seen as the primary purchaser. They finalized the deal, often appeared to make the final decision. But women were a very important influence on the decision. If the female did not like a particular brand, it was not likely to be purchased. Women were more concerned about comfort, feel, and looks while men were more concerned about the mechanical aspect of the cycle.
Demographics are relatively easy to identify, but they do not fully explain consumer purchase behavior. Psychographics are an individual’s activities, interests, and opinions. They help marketers to understand why consumers buy what they buy. Psychographics are often combined with demographic profiles to provide a much richer description of a target segment.
A well-known measurement of psychographics is the VALS2 typology. Consumers are divided into 8 different segments based on their AIO measures (activities, interests, and opinions). This type of information helps marketers design more effective communication. For instance, reaching achievers requires ads that stress careers, families, goals, and a conservative lifestyle. On the other hand, reaching experiencers requires ads to convey youthfulness, enthusiasm, impulsiveness, fashion and social acceptance.
Psychographic profiles have been developed for people as it relates to technology and their use of technology. New enthusiasts are on the cutting edge and eager to try new technologies. They tend to have higher incomes and a higher level of education. Hopefuls want to be on the cutting edge, but lack the resources to purchase new technology, which is often more expensive. Faithful are not eager to embrace new technology, but they are not averse to it either. Oldliners are not interested in new technology and resist changing from what they have. Independents have higher incomes, but do not value new technology. They like things the way they are. Surfers are ambivalent about technology and cynical about business. They see technology as a way for big business to rip you off.
Teenage markets have also been described in terms of psychographics. The largest group of teen males is young metrosexuals. They focus on outward appearance and comprise 25% of all teen males. Other groups of teenage males have been named big man on campus, technosapians, red-blooded boys, tuned inward, and under construction.
Teenage females have also been divided into psychographic groups. The largest group, making up 25% of teenage females, is the jockettes. This group has an active lifestyle and enjoys sports. Other female teenage groups are in-style socialites, most likely to succeed, style meets thrift, and traditionalists. By adding psychographic information to demographic data, a much richer understanding of the various teen groups emerge.
According to generation segmentation, seniors have a fixed income and spend heavily on health care and related medical items. This ad by St. Francis Medical Center is targeted to seniors informing them they are first in orthopedics and foremost in hip replacement.
Geodemographic segmentation combines demographic information, geographic information, and psychographic information. Geodemographic segmentation is beneficial for national firms conducting direct mail campaigns and for retailers in targeting customers in a geographic area around the store. The most well known geodemographic segmentation system is PRIZM. It consists of 62 different market segments. For every zip code in the United States, PRIZM identifies the market segments that reside there. For instance, in downtown Jackson, MS the two primary clusters are southside city and towns and gowns. The southside city cluster contains primarily young and elderly African-Americans, employed in low-paying blue collar jobs, with a lower level of education, who rent apartments, and read sports and fashion magazines.
Benefit segmentation focuses on the advantages consumers receive from a product rather than the characteristics of the consumer. An excellent example of benefit segmentation is the fitness industry. People exercise for different reasons. The three most common benefit segments are winners, dieters, and self-improvers. The winners exercise because they like to exercise. It is a way of life for them. The dieters join a fitness center to lose weight, or maintain their weight. Self-improvers are there primarily because a physician told them to be there. They have experienced a medical problem and realize they must exercise to regain body functions or maintain their health.
Usage segmentation focuses on how consumers use a product or on their purchase history. Marketers can create clusters of heavy users, light users, or any other category of users. By dividing the market in terms of usage, companies can target a specific cluster creating a unique marketing approach. The message to a light user of a product will certainly be different than a heavy user of a product. One of the goals of targeting light or average users is to move them up into a higher group in terms of usage.
Resorts often segment businesses based on product usage. This ad for Edgewater targets large businesses for conventions and conferences.
The ad by Sony seeks to position the product based on an attribute – the brightness of the projector light. The advertisement by Stetson is using the American cultural symbol of the cowboy to position its product.
A number of factors influence the relationship between promotions and sales. The goal of the promotion may be to increase brand awareness or build brand image. If so, there will be less impact on sales than with some of the other objectives. Threshold effects are present at the point where the advertising or communications begins to affect consumer responses in a positive direction. Carryover effects refer to an ads message being remembered or carried over to the time when the product is needed and the consumer is thinking about the purchase. Wear-out effects happen when an ad or message becomes old and stale and the consumer no longer pays attention to it. Decay effects occur when a company quits advertising and the brand name begins to fade in people’s memories. Sales can also be impacted by just random events, such as a major snow storm.
The straight line is an unrealistic assumption about the relationship between expenditures and sales. The bottom curve is more indicative of what happens. Advertising dollars are spent and for awhile nothing happens. Then consumers begin to pay attention and start purchasing the product, the threshold effect. As more advertising dollars are spent, diminishing returns occur. With each additional dollar in advertising, the impact is less and less. This is the concave downward response curve.
This ad by Yamaha relies on carryover effects of advertising. Boats are not purchased everyday so the hope of Yamaha is that when a consumer starts thinking about boats, he/she will remember the Yamaha brand and this ad.
The IMC Planning Process Target Budget Market Context Customers Competitors Objectives Communication Product IMC Positioning Component
CustomersThe IMC Planning Process Current customers Former customers Potential new customers Competitors’ customers
CompetitionThe IMC Planning Process Identify major competitors. Identify communication strategies and tactics of each competitor. Sources of information • Primary research • Secondary data • Research what others say 4-3
CommunicationsThe IMC Planning Process Company communications Industry communications Competitor communications
Tests to Determine if a ParticularMarket Segment Is Viable • The individuals or businesses within the segment are homogeneous. • The market segment is different from the population as a whole and distinct from other market segments. • The market segment is large enough to be financially viable to target with a separate marketing campaign. • The market segment must be reachable through some type of media or marketing communications method.
Psychographics and Technology New Enthusiasts – cutting edge, eager, high incomes/education Hopefuls – cutting edge, lack financial means Faithful – not eager, but not averse Oldliners – not interested in new technologies Independents – higher incomes, but do not value new technology Surfers – ambivalent about new technology, cynical about business
Teenage MarketsDemographic and Psychographic Young metrosexuals – top 25%, outward appearance Big man on campus Technosapians Red-blooded boys Tuned inward Under construction
Teenage MarketsDemographic and Psychographic Jockettes – top 25%, enjoy sports, active lifestyle In-style socialites Most likely to succeed Style meets thrift Traditionalists
Characteristics of Generation Segments Segment Year of Birth Characteristics Generation Y 1978-2992 Clothes, autos, college, televisions, stereos Generation X 1965-1977 Focus family and children Younger boomers 1954-1964 Focus family and home Older boomers 1945-1953 Upgrade home, children’s education, luxury items Seniors Up to 1945 Fixed income, health care
Usage Segmentation Usage or purchase history Create clusters Target specific clusters Create marketing programs for each cluster Measure growth and migration
Methods of Segmenting B-to-B Markets • Industry (NAICS/SIC codes) • Size of business • Geographic location • Product usage • Customer value
A business-to-businessadvertisement based onthe product usagesegmentation strategy.
Product Positioning Is the perception created in the consumer’s mind regarding the nature of the company and its products relative to the competition? Positioning is created by factors such as product quality, prices, distribution, image, and marketing communications.
Product Positioning Strategies • Product Attributes • Competitors • Use or application • Price/quality • Product user • Product class • Cultural symbol
A business-to-business advertisement An advertisement by Stetsonpositioned by the product’s attributes: positioned by cultural symbols.the brightness of the Sony projector.
Elements of Positioning Never completely fixed Applies to business-to-business also International positioning important Critical component of image and brand management
Marketing Communications Budget Budgets based on communication objectives marketing objectives Budgets vary from consumer to B-to-B markets Unrealistic assumption to assume direct relationship between advertising and sales
Factors Impacting RelationshipBetween Promotions and Sales The goal of the promotion Threshold effects Carryover effects Wear-out effects Decay effects Random events
A Sale-Response Function Curve Combined with the DownwardResponse Curve and Marginal Analysis
Carryover effects areimportant inadvertising productssuch as boats.
Methods of Determining Marketing Communication Budgets Percentage of sales Meet-the-competition “What we can afford” Objective and task Payout planning Quantitative models