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The Market Segmentation Process WTUC http://www.4cconsulting.com/uploadedImages/Management_consultancy/Intelligence_and_st...
Importance of Market Segmentation in Advertising <ul><li>To find profitable market segments </li></ul><ul><li>Scan marketp...
2-Step Strategy <ul><li>Identifying groups of people (or organizations) with certain shared needs and characteristics with...
Applying the Strategy Large market group <ul><li>Pool them together into one aggregate target market </li></ul><ul><li>The...
Target market-  which lays the foundation for developing the proper mix of marketing activities-including advertising Gene...
<ul><li>Markets consists of many segments </li></ul><ul><li>A company differentiate products and marketing strategy for ev...
Types of Targets <ul><li>Marketing activities are aimed at a particular segment of the population </li></ul><ul><li>Advert...
Types of Markets <ul><li>Companies use business advertising to reach people who buys good ad services for resale or for us...
<ul><li>Over half of all marketing is BTB </li></ul><ul><li>Manufactured goods, raw materials, services for law firms, acc...
http://futuresightconsulting.com/assets/images/FSC_Focus_MarketTargetingAndProfiling.jpg
Finding the Right Niche http://www.valicon.net/uploads/whowhatwhy_eng_popravki.gif
http://www.fivetwelvegroup.com/clientzone/uploads/images/FiveTwelve_Group_Segmentation_levels_v2.jpg
Behavioristic Segmentation <ul><li>User status </li></ul><ul><li>Usage rate </li></ul><ul><li>Purchase occasion </li></ul>...
User-Status Variables <ul><li>Sole users- most brand loyal, require least amount of advertising and promotion </li></ul><u...
Usage-Rate (Volume) Variables <ul><li>Light users </li></ul><ul><li>Medium users </li></ul><ul><li>Heavy users </li></ul>
 
http://pewsocialtrends.org/assets/images/94.gif
http://z.hubpages.com/u/517176_f260.jpg
Purchase-Occasion Variable <ul><li>Buyers are distinguished when they buy or use a product </li></ul><ul><li>Air travelers...
 
 
Benefit-Sought Variable <ul><li>Benefits </li></ul><ul><ul><li>High quality </li></ul></ul><ul><ul><li>Low price </li></ul...
http://ignitepartnership.com/blog/wp-content/uploads/personal%20brand%20pyramid.png
http://tomfishburne.typepad.com/tomfishburne/images/2008/02/10/080211attribute.jpg
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 <ul><li>Region </li></ul><ul><li>Country size </li></ul><ul><li>City size </li></ul><ul><li>Specif...
http://www.census.gov/econ/census02/img/division.gif
Demographic Segmentation <ul><li>Sex </li></ul><ul><li>Age </li></ul><ul><li>Ethnicity </li></ul><ul><li>Education </li></...
 
http://www.insidefacebook.com/wp-content/uploads/2009/02/20090201fbdemobar.png
Geodemographics Segmentation <ul><li>Demographics combined with geographic segmentation </li></ul><ul><li>People’s lives a...
https://www.dataexpress.vedaadvantage.com/newdesign/i/homepages/main_banner-landscape.jpg
Psychographic Segmentation <ul><li>Emotional appeal </li></ul><ul><li>Cultural values </li></ul><ul><li>Attitudes </li></u...
http://www.media-studies.ca/articles/images/VALS.jpg Basic principles or values Tangible markers of success or accomplish-...
Example: Company that markets high-end motorcycles <ul><li>A demographic profile might suggest that prospects are males be...
http://www-edc.eng.cam.ac.uk/betterdesign/images/rsz_marketsegintrotop__130.gif
http://www.clickz.com/_imgs/graphics/032608media-attitude.gif
What’s the psychographic element here?
What’s the psychographic element here?
http://www.marketsegmentation.com/images/ServiceBenefits.gif
http://www.consumerpsychologist.com/images/intro/consumer_behavior.png
Group discussion <ul><li>Hardee’s Thickburger </li></ul><ul><li>Big, premium burgers </li></ul>
Hardee’s Ad:  Who’s the Target Market?
Hardee’s Thickburger Target Market <ul><li>Young male demographic </li></ul><ul><li>‘ real’ men  </li></ul><ul><li>Meets c...
Another Hardee’s ad <ul><li>‘ We could’ve shown you some cowboy, sitting around a campfire, eating a Western Bacon Thickbu...
<ul><li>Hardee’s pays careful attention to the benefits sought by the target demographic and tailors its offering accordin...
Assignment 1 due Week 5 <ul><li>Describe an ad that seems to be directed toward a specific target market segment. Define i...
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The Market Segmentation Process

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The Market Segmentation Process

  1. 1. The Market Segmentation Process WTUC http://www.4cconsulting.com/uploadedImages/Management_consultancy/Intelligence_and_strategy/Segmentation.jpg
  2. 2. Importance of Market Segmentation in Advertising <ul><li>To find profitable market segments </li></ul><ul><li>Scan marketplace and see what various consumer segments need and want and how they might be better satisfied </li></ul>http://attractionmarketing.com/images/ad-Verizon.jpg
  3. 3. 2-Step Strategy <ul><li>Identifying groups of people (or organizations) with certain shared needs and characteristics within the broad markets for consumer of business products </li></ul><ul><li>Aggregating (combining) these groups into larger market segments according to their mutual interest ion the product’s utility. </li></ul>
  4. 4. Applying the Strategy Large market group <ul><li>Pool them together into one aggregate target market </li></ul><ul><li>These people share the same interests in relation to your product’s utility </li></ul>
  5. 5. 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
  6. 6. <ul><li>Markets consists of many segments </li></ul><ul><li>A company differentiate products and marketing strategy for every segment </li></ul><ul><li>Or simply concentrate on one segment </li></ul>
  7. 7. Types of Targets <ul><li>Marketing activities are aimed at a particular segment of the population </li></ul><ul><li>Advertising is aimed at a particular group </li></ul>Target market Target audience
  8. 8. Types of Markets <ul><li>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 </li></ul><ul><li>Also known as BTB </li></ul><ul><li>Most advertising falls under consumer advertising </li></ul><ul><li>Ad directed at consumers or people who buy the product for their own or someone else’s personal use </li></ul>Business Markets Consumer Markets
  9. 9. <ul><li>Over half of all marketing is BTB </li></ul><ul><li>Manufactured goods, raw materials, services for law firms, accountants, airlines, and advertising agencies </li></ul><ul><li>Need more specialized product knowledge </li></ul><ul><li>Advertising professionals must understand how people act and think, and why they buy what they buy </li></ul>Business Markets Consumer Markets
  10. 10. http://futuresightconsulting.com/assets/images/FSC_Focus_MarketTargetingAndProfiling.jpg
  11. 11. Finding the Right Niche http://www.valicon.net/uploads/whowhatwhy_eng_popravki.gif
  12. 12. http://www.fivetwelvegroup.com/clientzone/uploads/images/FiveTwelve_Group_Segmentation_levels_v2.jpg
  13. 13. Behavioristic Segmentation <ul><li>User status </li></ul><ul><li>Usage rate </li></ul><ul><li>Purchase occasion </li></ul><ul><li>Benefits sought </li></ul>
  14. 14. User-Status Variables <ul><li>Sole users- most brand loyal, require least amount of advertising and promotion </li></ul><ul><li>Semisole users- typically use Brand A but have an alternate selection if it is not available or if alternate is promoted with a discount </li></ul><ul><li>Discount users- semisole users of competing Brand B. They don’t buy Brand A at full price </li></ul><ul><li>Aware Nontriers- use competitive products in the category but haven’t taken a liking to Brand A. These people rarely offer potential </li></ul><ul><li>Trial/Rejectors- bought Brand A’s advertising but didn’t like the product. Only reformulation of Brand A will bring them back </li></ul><ul><li>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 </li></ul>
  15. 15. Usage-Rate (Volume) Variables <ul><li>Light users </li></ul><ul><li>Medium users </li></ul><ul><li>Heavy users </li></ul>
  16. 17. http://pewsocialtrends.org/assets/images/94.gif
  17. 18. http://z.hubpages.com/u/517176_f260.jpg
  18. 19. Purchase-Occasion Variable <ul><li>Buyers are distinguished when they buy or use a product </li></ul><ul><li>Air travelers- may fly for business or vacation </li></ul><ul><li>Purchase- affected by frequency of need (regular/occasional), a fad (computer games), seasons (water skis, raincoats) </li></ul><ul><li>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 </li></ul>
  19. 22. Benefit-Sought Variable <ul><li>Benefits </li></ul><ul><ul><li>High quality </li></ul></ul><ul><ul><li>Low price </li></ul></ul><ul><ul><li>Status </li></ul></ul><ul><ul><li>Sex appeal </li></ul></ul><ul><ul><li>Good taste </li></ul></ul><ul><ul><li>Health conscious </li></ul></ul><ul><ul><li>Symbolism- what the brand means to them or to their friends or some reference group </li></ul></ul><ul><li>Switching occurs in response to different needs </li></ul>
  20. 23. http://ignitepartnership.com/blog/wp-content/uploads/personal%20brand%20pyramid.png
  21. 24. http://tomfishburne.typepad.com/tomfishburne/images/2008/02/10/080211attribute.jpg
  22. 25. What’s the User Benefit here?
  23. 26. High-Quality Benefit
  24. 27. What’s the User Benefit here?
  25. 28. Low Price benefit
  26. 29. What’s the User Benefit here?
  27. 30. Status Benefit
  28. 31. What’s the User Benefit here?
  29. 32. Status Benefit
  30. 33. What’s the User Benefit here?
  31. 34. Sex Appeal Benefit
  32. 35. What’s the User Benefit here?
  33. 36. Good Taste Benefit
  34. 37. What’s the User Benefit here?
  35. 38. Health Conscious Benefit
  36. 39. What’s the User Benefit here?
  37. 40. Brand Symbol Benefit
  38. 41. Geographic Segmentation <ul><li>Region </li></ul><ul><li>Country size </li></ul><ul><li>City size </li></ul><ul><li>Specific locations </li></ul><ul><li>Types of stores </li></ul>
  39. 42. http://www.census.gov/econ/census02/img/division.gif
  40. 43. Demographic Segmentation <ul><li>Sex </li></ul><ul><li>Age </li></ul><ul><li>Ethnicity </li></ul><ul><li>Education </li></ul><ul><li>Occupation </li></ul><ul><li>Income </li></ul><ul><li>And other quantifiable factors </li></ul>
  41. 45. http://www.insidefacebook.com/wp-content/uploads/2009/02/20090201fbdemobar.png
  42. 46. Geodemographics Segmentation <ul><li>Demographics combined with geographic segmentation </li></ul><ul><li>People’s lives are influenced by their environment and ethnicity </li></ul>
  43. 47. https://www.dataexpress.vedaadvantage.com/newdesign/i/homepages/main_banner-landscape.jpg
  44. 48. Psychographic Segmentation <ul><li>Emotional appeal </li></ul><ul><li>Cultural values </li></ul><ul><li>Attitudes </li></ul><ul><li>Personality </li></ul><ul><li>Lifestyle </li></ul><ul><ul><li>View people as individuals with feelings and inclinations </li></ul></ul>
  45. 49. 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
  46. 50. Example: Company that markets high-end motorcycles <ul><li>A demographic profile might suggest that prospects are males between the ages of 30 and 50 </li></ul><ul><li>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 </li></ul>
  47. 51. http://www-edc.eng.cam.ac.uk/betterdesign/images/rsz_marketsegintrotop__130.gif
  48. 52. http://www.clickz.com/_imgs/graphics/032608media-attitude.gif
  49. 53. What’s the psychographic element here?
  50. 54. What’s the psychographic element here?
  51. 55. http://www.marketsegmentation.com/images/ServiceBenefits.gif
  52. 56. http://www.consumerpsychologist.com/images/intro/consumer_behavior.png
  53. 57. Group discussion <ul><li>Hardee’s Thickburger </li></ul><ul><li>Big, premium burgers </li></ul>
  54. 58. Hardee’s Ad: Who’s the Target Market?
  55. 59. Hardee’s Thickburger Target Market <ul><li>Young male demographic </li></ul><ul><li>‘ real’ men </li></ul><ul><li>Meets consumer taste expectations </li></ul><ul><li>Trade on the notion of ‘male identity’ </li></ul><ul><li>Paris doesn’t have anything to do with the burger </li></ul><ul><li>Caused buzz among male demographic </li></ul>Spicyparis.com’s traffic shot so high that it crashed the server
  56. 60. Another Hardee’s ad <ul><li>‘ We could’ve shown you some cowboy, sitting around a campfire, eating a Western Bacon Thickburger…but who’d wanna see that?” </li></ul>
  57. 61. <ul><li>Hardee’s pays careful attention to the benefits sought by the target demographic and tailors its offering accordingly </li></ul><ul><li>Crafts advertising messages that will grab attention of the young male fast-food eaters </li></ul>
  58. 62. Assignment 1 due Week 5 <ul><li>Describe an ad that seems to be directed toward a specific target market segment. Define it using behavioristic, demographic, psychographic, and geographic variables. </li></ul><ul><li>See page 91 to read Hardee’s ad example </li></ul><ul><li>Print and submit on 3/16 </li></ul>

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