5. Market Segmentation
Market Segmentation Involves Four Steps:
1. Identifying Product-Related Need Sets
2. Grouping Customers with Similar Need Sets
3. Describing Each Group
4. Selecting an Attractive Segment(s) to Serve
6. The PURPOSE OF MARKETING is to help
the consumer experience the proverbial
Tattoo that is already within him/her.
The desire of
having tattoo
is already
inside the
consumer
The desire to
wear a shoe
like this is
already inside
the consumer
To satisfy the consumer, you have to bring that tattoo out.
Do we always know our N&Ws?
7.
8.
9. This requires a historical analysis of an individual
customer’s revenues and costs.
Costs must include all expenses involved in servicing
this customer.
Very few companies capture transaction-specific
data at the individual customer level over extended
time periods.
Caution: What are the costs of “firing” unwanted
customers?
10. The marketing concept is universal but
customer wants are not
IMR helps firms understand consumers across
national borders
Think globally, learn locally
▪ Nestle approach
11.
12. Manifest
1. Undisguised Questioning
2. Disguised Questioning (Conscious Projection)
Third Person
Mason Haire Technique
Latent
Disguised, Unguarded (Natural) response (Unconscious
Projection) (see Table 10-2 for details)
Word Association
Sentence Completion
Story Completion
Mason Haire Technique
15. Access to information
Secondary data availability and reliability
Primary data issues
▪ Data collection – e.g., respondents access to Internet,
reliability of postal service
▪ Language barriers
▪ Is 100% accuracy in translation possible?
High-context vs. low-context cultures
Some concepts are not universal
Back-translation
▪ Cultural norm barriers
▪ Response to incentives
25. 25
Lower-class:
bowling, hunting, visiting casinos, TV, and bingo
Middle-class
team sports (e.g., volleyball), cards, shopping, visiting
friends
Upper-class:
golf, polo, operas, symphonies, and plays
Budweiser Busch Michelob
26. 26
You are the owner of two furniture stores, one
catering to upper-middle class consumers and the
other to lower-class consumer. How do social class
differences influence each store’s
▪ product lines and styles
▪ advertising media selection
▪ the copy and communication style used in the ads
▪ payment policies
No such thing as the general public
Messages and strategies need to be in alignment with who you are trying to reach
People don’t all act the same way based on age or zip code
Identify the early adopters and innovators … they can help pull everyone else behind them
Market Segmentation Involves Four Steps:
Identifying Product-Related Need Sets
Grouping Customers with Similar Need Sets
Describing Each Group
Selecting an Attractive Segment(s) to Serve
increasing market share actually might lead to lower customer satisfaction and provide preliminary empirical support for this hypothesis. Finally, two new findings emerge:
一个品牌，如果聚焦于某一个明确的细分市场，通常而言能够针对该细分市场人群的特点开发适销对路的产品，并且提供更优质的服务，相对而言，比较容易取得高的用户满意度。另一个品牌，如果针对大众市场开发产品，或者产品线覆盖非常多的细分市场，从整体而言，虽然市场占有率高，却很可能在用户满意度的用户评价方面，低于那些聚焦于细分市场的品牌。
由于细分市场规模的不同，具有高满意度的产品，不一定具有高的市场占有率，但是，在保持现有的细分市场格局下，用户满意度的提升有助于市场占有率的提高。
Increase customer satisfaction
Some customers are more valuable to the company than others (Tools: analysis of customer lifetime value, coding, sorting and routing)
Must know and identify the customer across marketing channels, transactions and interactions (Tools: cookies; matching online and offline data)
Customers change over time so companies must learn from consumers continually (Tools: research, call center management)
Customization/personalization
- Jeff Bezos “our vision is that if we have 20 million customers we should have 20 million stores.”
“Customers are always right”; “Customers are God” – What’s happening? ---expensive!
Several segmentation variables can slice up the market for all the shoe variations available today. First, not everyone is willing to or able to pay $150 on the latest running shoe, so marketers consider income. Second, in each category, men and women may have different style preferences.
1. Geographic Segmentation:
Dividing a market into different geographical units, such as regions, provinces, counties, or cities----Home Depot is introducing neighborhood stores that look like its traditional stores but at about 2/3 the size. It is placing these stores in high-density markets where full-size stores are impractical. Similarly, Wal-Mart is testing Neighborhood Market grocery stores to complement its supercentres.
Develop regional marketing programs
Demographic Segmentation:
Dividing a market into groups based on demographic variables such as:
Age, gender, family size or life cycle, income, occupation, education, religion, race, and nationality
The most popular bases for segmenting consumer markets
Easier to measure than most segmentation variables
Behaviors will often vary according to these dimensions
Age and life-cycle stage
Wants and needs vary with stage
Guard against stereotypes---70 doesn’t mean they don’t have needs for sports.
Gender
Buying patterns frequently follow gender---Women buy nearly half of all new cars sold and influence 80% of all new car purchasing decisions.
Income
Affluent to restricted incomes
Demographic information is useful, but it does not always provide enough information to divide consumers into meaningful segments. For example, we can use demographic variables to discover that the female college and university student segment uses a lot of perfume, but not necessarily to know whether different women in this segment prefer perfumes that allow them to express a self-image that is, say, sexy versus athletic. Psychographic data are useful to understand differences between consumers, who may be demographically similar to one another but whose needs vary.
Although demographic segmentation divides the market in terms of objective characteristics, psycholgraphics gets beneath the surfact to segment the market in terms of shared attitudes, interests, and opinions.
Psychographics
Market segmentation on the basis of personality, motives, and lifestyles
Divide market into groups based on consumer knowledge, attitude, use, or response to a product
Occasions - By occasions when buyers get the idea to buy, actually make the purchase, or use the item
Benefits sought - The process of grouping customers into market segments according to the benefits they seek from the product. ----- Major benefits, people seeking, brands deliver
User status - Non-, ex-, potential, first-time, regular
Usage rate - Dividing a market by the amount of product bought or consumed.
The 80/20 Principle: A principle holding that 20 percent of all customers generate 80 percent of the demand.
Light - medium – heavy; Heavy users may dominate total market
Loyalty status - Toward brand, store, and/or company; Frequent buyers may not be loyal; habit, indifference, low price, product unavailability
