presentation

1. E-Marketing/7E
Chapter 8
Segmentation, Targeting,
Differentiation, and
Positioning
Strategies

2. Chapter 8 Objectives
• After reading Chapter 8, you will be able to:
–Outline the characteristics of the three
major markets for e-business.
–Explain why and how e-marketers use
market segmentation to reach online
customers.
–List the most commonly used market
segmentation bases and variables.
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3. Chapter 8 Objectives, cont.
• Outline several types of internet usage
segments and their characteristics.
• Describe two important coverage
strategies e-marketers can use to target
online customers.
• Define differentiation and
positioning and give examples of online
companies using them.
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4. The 1-800-Flowers.com
Story

5. • Jim McCann started 1-800-Flowers as a traditional
retailer in New York City in 1976.
• In 1995, he extended the brand to the internet and
offer 24/7 worldwide delivery.
• He used SAS data mining software to identify
customer segments for better targeting.
– The software analyzed the clickstreams and
purchasing patterns of the firm’s 21 million
customers.
The 1-800-Flowers Story
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6. The 1-800-Flowers Story, cont.
• 1-800-Flowers can respond to the
segment of one person and their
purchasing patterns.
• The Web site’s Facebook page has nearly
500,000 likes, nearly 14,000 people talking about
the site, and over 20,000 Twitter followers.
• Over half of its 4.6M online customers are
repeat buyers.
• Why do you think better segmentation and targeting
has lead to increased customer satisfaction?
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7. Segmentation Targeting
Overview, & Three
Markets

8. Segmentation & Targeting
Overview
• Marketing segmentation is the process
of grouping individuals or businesses,
according to similarities in use,
consumption, or benefits of a product or
service.
• Market targeting is the process of
selecting market segments that are most
attractive to the firm.
– Targeting segments can include
accessibility, profitability and growth
potential.
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9. Three Markets
• Three important markets sell to and buy from
each other:
– Business Market: Marketing of products for
use in the business operation, as components, or for
resale  B2B, B2C, B2G
– Government Market: Federal, state, county,
city, and other agencies G2B, G2C, G2G
– Consumer Market: The consumer market
involves marketing goods and services to end
consumers C2B, C2C, C2G
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10. U.S. Government Federal
Business Opportunities
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11. Market Segmentation
Bases & Variables

12. • Marketers create segments to identify and
reach the right people at the right time.
– Demographics: Gender, Age, Income, Edu, Etnicity
– Geographic location: City, County, State, Region, Ctry
– Psychographics: Activity, Interest, Opinion, Personality, Value
– Behavior: Benefits sought, Usage lvl, Online engagement lvl, User status
• Claritas PRIZM System can also combine bases,
such as geodemographics (geography and
demographics).
Market Segmentation Bases
and Variables
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13. Geographic Segments
• Product distribution strategy is a driving
force behind geographic segmentation.
• Countries may be segmented based on
internet usage.
– China has 513M users.
– U.S. has 245M users.
• Geographic markets may also be evaluated by
rates of global Facebook and search engine
adoption, language spoken, and other variables.
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14. Top Internet Languages
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15. • In developed nations, users are much like the
mainstream population demographically.
• Two market segments have recently caught
the interest of e-marketers.
– Millennials: 60 million people born
between 1979 and 1994, over 95% use the
internet.
– Kids: Under 11 segment will more than double
to 25 million by 2015.
Demographic Segments
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16. Psychographic Segments
• User psychographics include:
–Personality (P)
–Values (V)
–Lifestyles (L)
–Activities (A)
–Interests ( I )
–Opinions (O)
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17. Interest Communities

18. Interest Communities
• Exhibit 8.7 lists: 10 important types of
online communities, including social networking.
• Ways to target online communities:
– Provide online discussion groups, bulletin
boards, and events or through company-owned social
network pages.
– Advertise on another firm’s community site.
– The firm can join the communities and listen
and learn from others.
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19. Interest Communities
Exhibit 8.7 lists: 10 important types of online
communities, including social networking.
1. Entertainment communities - Gaming & secondlife.com
2. Social networing communities – dating, meet others
3. Trading communities – exchanging goods & services
4. Education communities – education disciplines
5. Scheduled events communities – online conference etc.
6. Advocacy communities – nonprofit, public opinion etc.
7. Brand communities – CRM communities, branding
8. Consumer communities – cosumer products review opinion
discussion.
9. Employee communities – LinkedIn.com etc.
10.Special topics communities – movies, automobiles other
hobbies com.
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21. Attitudes and Behaviors
• Psychographic information helps e-
marketers define and describe market segments.
Behaviors: the ways of talking, eating, registering websites, posting comments
on blogs, Liking, a facebooks page, visiting website to shop a product etc.
• Some marketers believe that a segment’s
attitudes toward technology can help
determine buying behavior.
– Forrester Research measures attitudes
toward technology with a system called
Technographics, which identified 10 consumer
segments in the U.S. (Exhibit 8.9).
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22. Attitute toward Technology
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Forrester Research measures attitudes toward technology
with a system called Technographics, which identified 10 consumer
segments in the U.S. (Exhibit 8.9).
1. Career: Fast forwards – high income, willing to invest, signal their superior status
2. Career: Techno-strivers - Low income, aspire to be like fast forwards will invest
3. Career: Handshakers - high income, do not feel the urge to explore innovation but...
4. Family: New Age Nurturer - want to provide secure future or their family members..
5. Family: Digital Hopeful – Prioritize invest time in creating a secure environment for.
6. Family: Traditionalists - expect the product of the past will help provide security to...
7. Entertainment: Mouse potatoes - want to be stimulated & entertained.....
8. Entertainment: Gadget Grabbers – like 7, but hv to content themselves with
cheaper ways to scratch the same itches
9. Entertainment: Media Junkies - live between two worlds, wants to experience new
things but no confidence wl beneth them
10. Sidelined Citizens - lack of resources and ear of losing what they have.......

23. Influentials - testimonials
• Influentials are individuals who are opinion
leaders online. They include:
– Online journalists, such as Arianna Huffington
of The Huffington Post.
– Industry opinion leaders, such as Brian
Solis, author, speaker, analyst, and blogger.
– Influential social network authors, such
as Lady Gaga.
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24. • Two common segmentation variables are
benefits sought and product usage.
– Marketers using benefits sought segmentation
to form groups of consumers based on the benefits sought from
products: Connect; Create; Learn, Enjoy; Trade; Give.
– Marketers often segment by light, medium, and
heavy product usage.
– Marketers can segment users as brand loyal, loyal to
a competitive product, switchers, and nonusers.
Behavior Segments
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25. Benefit sought Segments
• To determine benefits sought, marketers can
look at what people actually do online.
• Online activities include connect, create,
learn, enjoy, trade, and give.
• Marketers also check popular Web sites.
– Microsoft, Google, and Yahoo! are consistently
among the top Web sites in most countries.
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26. Usage Segments
• Marketers can segment according to technology-
use characteristics such as smartphone,
tablet, or PC and which browser they use.
• Mobile access: 55% of cell phone owners
connect to the internet using smartphones.
• 90% of smartphone users have taken an action,
such as booking a hotel, after searching.
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27. Usage Segments
• Use smart-phones at home 93%
• Browse internet 81%, search engine 77%
• Access social networking sites 89%
• Read news and research 82%
• Conduct shopping 79%
• Downloading Apps 68%
• Looking or more information 49%
• Watch videos 48%
• Purchase on mobiles websites 27%
• 90% smartphones users have taken action after
searching, like book hotels or purchases.
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28. Online engagement level
• Forrester categorizes social media users
according to usage segments that are highly engaged
online:
– Creators who gather other people’s content, upload or share it.
– Conversationalists - update status, post updates on Twitter
– Critics - ratings/review, comments, contribute, edits articles, wikis
– Collectors - votes or websites online, add tags, pages photos...
– Joiners - maintain proiles, visit sites....
– Spectators - read blogs, listen podcast, watch videos, read Tweets..
– Inactives – non o fthe above
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29. Target Online
Customers

30. Targeting Online Customers
• E-marketers select a targeting strategy.
– Which targets to serve online.
– Which locations.
– Other factors.
• Two targeting strategies are well-suited
for the internet.
– Niche marketing.
– Micromarketing (individualized targeting).
• The internet’s big promise is individualized
targeting.
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31. • Differentiation is what a company does to the product to
convince the market that the product has specific advantages.
• A company can differentiate its offering along
many dimensions, including:
– Product innovation - pinterest
– Mass customization – Blue Nile jewelry site
– Service differentiation - Amazon.com
– Channel differentiation – Netlix oering streaming TV and
Movies
– Site atmospherics – webs and social media page with user
riendly
– User generated content - a company dierentiate using
crowdsourcing to generate content.....
Differentiation Online
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32. • Positioning is a strategy to create a desired
image for a company and its products in the minds of
a chosen user segment.
• The e-marketer’s goal is to build a position on one or
more bases that are relevant and important to the
consumer.
• Firms can position based on technology,
benefits, user category, or competitive position.
– The brand story must be told from the customer’s
viewpoint.
Online Positioning Bases
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33. All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of the
publisher. Printed in the United States of America.
Copyright © 2014 Pearson Education, Inc.
Publishing as Prentice Hall
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