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Consumer Behavior
Pnl/september 2005

Market Segmentation

3-1
Who is the Target Market?
• Got Milk?

3-2
Who is the Target Market?

3-3
http://www.eu.levi.com/
3-4
Target Market for Car Shows
•
•
•
•

3-5

80% male viewer ship
Subtly suggestive show names
Sports Cars Gone Wild
Autoroti...
Market
Segmentation

3-6

The process of
dividing a potential
market into distinct
subsets of consumers
and selecting one ...
Three Phases of Marketing
Strategy
• Phase 1: Market Segmentation
• Phase 2: Target Market and Marketing Mix
Selection
• P...
Table 3.1: Sodexho’s Segmentation of
College-age Eating Patterns
Star Gazers
• Light, healthy foods
• Price insensitive
• ...
“Best” Customer Segmentation
High
High

Current Share

HiHighs
(stroke)

LowHighs
(chase)

HiLows
(tickle)

LoLows
(starve...
Segmentation Studies
• Designed to discover the needs and wants
of specific groups of consumers in order to
develop specia...
Bases for Segmentation
•
•
•
•
•
•
•
•
•
3-11

Geographic Segmentation
Demographic Segmentation
Psychological Segmentation...
Table 3.2 Market Segmentation
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Region
Southwest, ...
Table 3.2, continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Needs-motivation
Shelter...
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Usage rate
Heavy users, medium users, light use...
Geographic
Segmentation

3-15

The division of a total
potential market into
smaller subgroups on
the basis of
geographic ...
Demographic Segmentation
•
•
•
•

3-16

Age
Sex
Marital Status
Income, Education, and Occupation
Age: Segmentation by Age Effects
and Cohort Effects
• Seven Life Development Stages (Table 3.3)
– Provisional Adulthood
• ...
Marital Status
• Households as a consuming unit
–
–
–
–

3-18

Singles
Divorced
Single parents
Dual-income married
Psychological Segmentation
•
•
•
•
•

3-19

Motivations
Personality
Perceptions
Learning
Attitudes
A.I.Os

3-20

Psychographic
(lifestyle) variables
that focus on
Activities, Interests,
and Opinions.
Table 3.7 A Hypothetical Psychographic
Profile of the Techno-Road-Warrior
•Sends and/or receives 15 or more e-mail
message...
Sociocultural Segmentation
• Family Life Cycle
• Social Class
• Culture, Subculture, and Cross-Culture

3-22
Family Life Cycle
• Phases a family goes through in their
formation, growth, and final dissolution
–
–
–
–
–

Bachelorhood...
Trump and Knauss
• 15-Carot Ring
• Gown $100-200K

3-24
Use-Related Segmentation
• Rate of Usage
– Heavy vs. Light

• Awareness Status
– Aware vs. Unaware

• Brand Loyalty
– Bran...
Usage-Situation Segmentation
• Segmenting on the basis of special
occasions or situations
• Example Statements:
– Whenever...
Benefit Segmentation
• Segmenting on the basis of the most
important and meaningful benefit
– Prudential - financial secur...
Figure 3.5
Ad Offering
Combined
Benefits

3-28
Hybrid Segmentation Approaches
• Psychographic-Demographic Profiles
• Geodemographic Segmentation
• SRI Consulting’s Value...
Table 3.8 Demographic-Psychographic
Profile of Newsweek
•
•
•
•
•
•
•
•

3-30

Total adult readers 19,593,000
Men
Professi...
Table 3.9 Demographic-Psychographic
Internet Shopping Styles
•
•
•
•
•
•
3-31

E-bivalent Newbies
Time-Sensitive Materiali...
Table 3.10 Sample Claritas
Geodemographic Clusters
Blue Blood Estates
• .8% of U.S. households
• Professional
• Elite supe...
Figure 3.8
VALS

ACTUALIZERS

Principle Oriented Status Oriented Action Oriented

FULFILLEDS

BELIEVERS

ACHIEVERS EXPERIE...
Table 3.11 Size of VALS Segment as
Percent of U.S. Population
VALS

TM

Actualizer
Fulfilled
Believer
Achiever
Striver
Exp...
Mindbase Segmentation
• Monitor Mindbase based on Yankelovich’s
Monitor Survey of American Values and
Attitudes
• Table 3....
Table 3.12 Eight Major Mindbase
Segments
•
•
•
•

3-37

Up and Comers
Young Materialists
Stressed by Life
New
Traditionali...
Criteria For Effective Targeting of
Market Segments
•
•
•
•

3-38

Identification
Sufficiency
Stability
Accessibility
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Market segmentation of conbehavior

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Market segmentation of conbehavior

  1. 1. Consumer Behavior Pnl/september 2005 Market Segmentation 3-1
  2. 2. Who is the Target Market? • Got Milk? 3-2
  3. 3. Who is the Target Market? 3-3
  4. 4. http://www.eu.levi.com/ 3-4
  5. 5. Target Market for Car Shows • • • • 3-5 80% male viewer ship Subtly suggestive show names Sports Cars Gone Wild Autorotica
  6. 6. Market Segmentation 3-6 The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.
  7. 7. Three Phases of Marketing Strategy • Phase 1: Market Segmentation • Phase 2: Target Market and Marketing Mix Selection • Phase 3: Product/Brand Positioning 3-7
  8. 8. Table 3.1: Sodexho’s Segmentation of College-age Eating Patterns Star Gazers • Light, healthy foods • Price insensitive • Brand conscious • Employed full-time over summer • Active, out-going • Family income > 100,000 3-8 Fun Express • Variety, taste, and nutrition • Price conscious • Work part-time over summer • Value leisure time • Family income $30,000 - 60,000
  9. 9. “Best” Customer Segmentation High High Current Share HiHighs (stroke) LowHighs (chase) HiLows (tickle) LoLows (starve) Consumption Low 3-9 Low
  10. 10. Segmentation Studies • Designed to discover the needs and wants of specific groups of consumers in order to develop specialized products to satisfy specific group needs (e.g., Centrum) • Designed to guide the repositioning of a product (e.g., Nintendo) • Used to identify the most appropriate media for advertising (e.g., People and Teen People) 3-10
  11. 11. Bases for Segmentation • • • • • • • • • 3-11 Geographic Segmentation Demographic Segmentation Psychological Segmentation Psychographic Segmentation Sociocultural Segmentation Use-Related Segmentation Usage-Situation Segmentation Benefit Segmentation Hybrid Segmentation Approaches
  12. 12. Table 3.2 Market Segmentation SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Region Southwest, Mountain States, Alaska, Hawaii City Size Major metropolitan areas, small cities, towns Density of area Urban, suburban, exurban, rural Climate Temperate, hot, humid, rainy Demographic Segmentation Age Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Sex Male, female Marital status Single, married, divorced, living together, widowed Income Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over Education Some high school, high school graduate, some college, college graduate, postgraduate Occupation Professional, blue-collar, white-collar, agricultural, military 3-12
  13. 13. Table 3.2, continued SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychological Segmentation Needs-motivation Shelter, safety, security, affection, sense of self-worth Personality Extroverts, novelty seeker, aggressives, low dogmatics Perception Low-risk, moderate-risk, high-risk Learning-involvement Low-involvement, high-involvement Attitudes Positive attitude, negative attitude Psychographic (Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts, status seekers Sociocultural Segmentation Cultures American, Italian, Chinese, Mexican, French, Pakistani Religion Catholic, Protestant, Jewish, Moslem, other Subcultures (Race/ethnic) African-American, Caucasian, Asian, Hispanic Social class Lower, middle, upper Family life cycle Bachelors, young married, full nesters, empty nesters 3-13
  14. 14. SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Use-Related Segmentation Usage rate Heavy users, medium users, light users, non users Awareness status Unaware, aware, interested, enthusiastic Brand loyalty None, some, strong Use-Situation Segmentation Time Leisure, work, rush, morning, night Objective Personal, gift, snack, fun, achievement Location Home, work, friend’s home, in-store Person Self, family members, friends, boss, peers Benefit Segmentation Convenience, social acceptance, long lasting, economy, value-for-the-money Hybrid Segmentation Demographic/ Combination of demographic and psychographic profiles Psychographics of consumer segments profiles Geodemographics “Money and Brains,” “Black Enterprise,” “Old Yankee Rows,” “Downtown Dixie-Style” SRI VALSTM Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler 3-14
  15. 15. Geographic Segmentation 3-15 The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, state, or city).
  16. 16. Demographic Segmentation • • • • 3-16 Age Sex Marital Status Income, Education, and Occupation
  17. 17. Age: Segmentation by Age Effects and Cohort Effects • Seven Life Development Stages (Table 3.3) – Provisional Adulthood • Pulling up roots – First Adulthood • Reaching out, Questions/questions, Mid-life explosion – Second Adulthood • Settling Down, Mellowing, Retirement 3-17
  18. 18. Marital Status • Households as a consuming unit – – – – 3-18 Singles Divorced Single parents Dual-income married
  19. 19. Psychological Segmentation • • • • • 3-19 Motivations Personality Perceptions Learning Attitudes
  20. 20. A.I.Os 3-20 Psychographic (lifestyle) variables that focus on Activities, Interests, and Opinions.
  21. 21. Table 3.7 A Hypothetical Psychographic Profile of the Techno-Road-Warrior •Sends and/or receives 15 or more e-mail messages a week •Regularly visits Web sites to gather information and/or to comparison shop •Often buys personal items via 800 numbers and/or over the Internet •May trade stocks and/or make travel reservations over the Internet •Earns $100,000 or more a year 3-21
  22. 22. Sociocultural Segmentation • Family Life Cycle • Social Class • Culture, Subculture, and Cross-Culture 3-22
  23. 23. Family Life Cycle • Phases a family goes through in their formation, growth, and final dissolution – – – – – Bachelorhood Honeymooners Parenthood Post-parenthood Dissolution • Explicit basis: marital status, family status • Implicit basis: age, income, employment 3-23
  24. 24. Trump and Knauss • 15-Carot Ring • Gown $100-200K 3-24
  25. 25. Use-Related Segmentation • Rate of Usage – Heavy vs. Light • Awareness Status – Aware vs. Unaware • Brand Loyalty – Brand Loyal vs. Brand Switchers 3-25
  26. 26. Usage-Situation Segmentation • Segmenting on the basis of special occasions 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 at a suites hotel. – I always buy my wife flowers on Valentine’s Day. 3-26
  27. 27. Benefit Segmentation • Segmenting on the basis of the most important and meaningful benefit – Prudential - financial security – Iomega - data protection – Wheaties - good health – Eclipse - fresh breath 3-27
  28. 28. Figure 3.5 Ad Offering Combined Benefits 3-28
  29. 29. Hybrid Segmentation Approaches • Psychographic-Demographic Profiles • Geodemographic Segmentation • SRI Consulting’s Values and Lifestyle System (VALSTM) 3-29
  30. 30. Table 3.8 Demographic-Psychographic Profile of Newsweek • • • • • • • • 3-30 Total adult readers 19,593,000 Men Professionals/ Managers Age 35-49 Household income >$100,000 Married Own laptop PC Spent $3000+ on vacation last year % Index 100.0 55.9 35.3 36.5 25.1 62.4 12.0 12.3 100 117 174 114 172 109 150 164
  31. 31. Table 3.9 Demographic-Psychographic Internet Shopping Styles • • • • • • 3-31 E-bivalent Newbies Time-Sensitive Materialists Clicks & Mortar Hooked, Online, & Single Hunter-Gatherers Brand Loyalists
  32. 32. Table 3.10 Sample Claritas Geodemographic Clusters Blue Blood Estates • .8% of U.S. households • Professional • Elite super-rich • College graduate • 35-44, 45-54, 55-64 • Country club members, own mutual phones, play golf 3-32 Young Influentials • 1.1% of U.S. households • Professional • College graduate • Under 24, 25-34 • Yuppies, drink imported beer, read fashion magazines
  33. 33. Figure 3.8 VALS ACTUALIZERS Principle Oriented Status Oriented Action Oriented FULFILLEDS BELIEVERS ACHIEVERS EXPERIENCERS STRIVERS STRUGGLERS 3-33 High Resources MAKERS Low Resources
  34. 34. Table 3.11 Size of VALS Segment as Percent of U.S. Population VALS TM Actualizer Fulfilled Believer Achiever Striver Experiencer Maker Struggler 3-35 SEGMENT PERCENT OF POPULATION 11.7% 10.5 17.0 14.7 11.8 12.9 12.0 9.5
  35. 35. Mindbase Segmentation • Monitor Mindbase based on Yankelovich’s Monitor Survey of American Values and Attitudes • Table 3.12 3-36
  36. 36. Table 3.12 Eight Major Mindbase Segments • • • • 3-37 Up and Comers Young Materialists Stressed by Life New Traditionalists • • • • Family Limited Detached Introverts Renaissance Elders Retired from Life
  37. 37. Criteria For Effective Targeting of Market Segments • • • • 3-38 Identification Sufficiency Stability Accessibility

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