Targeting Strategies

1. TARGETING STRATEGIES:
DEMOGRAPHIC, BEHAVIORAL,
AND RELATIONSHIP
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3. Introduction
▮Market - Group of people with sufficient
purchasing power, authority, and willingness to
buy
Identify, evaluate & selecting
▮Target market - Group of people a firm
believes is most likely to buy its goods and
services
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4. Types of Markets
▮Consumer products
▮Business products
EXAMPLES OF BOTH
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5. The Role of Market Segmentation
▮Marketing strategies must be adjusted
• Needs, preferences, purchase power
▮Market segmentation - Division of the
total market into smaller, relatively
homogenous groups
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6. Criteria for Effective Segmentation
1. Measurable purchasing power and size
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1:18
http://www.youtube.com/watch?v
=jii3pTY_F64

7. Criteria for Effective Segmentation
2. Find a way to effectively promote and serve
the market segment
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http://adsoftheworld.com/media/tv/firestone_working_mom

8. Criteria for Effective Segmentation
3. Marketers must then identify segments
large enough to give them good profit
potential
FEMALES INFLUENCE 80-90 PERCENT OF HOME
PURCHASES
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http://www.designbasics.com/bookstore/her_home_magazine.asp

9. Criteria for Effective Segmentation
4. The firm must aim for segments that match
its marketing capabilities
Fastest growing market?
Harley Davidson
1 in 4 motorcyclists
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10. Segmenting Consumer Markets
FOUR COMMON BASES FOR SEGMENTING
• Geographic segmentation
• Demographic segmentation
• Psychographic segmentation
• Product-related segmentation
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12. Geographic Segmentation
▮Homogenous groups based on location
http://www.youtube.com/watch?v=V8SjkDq2ZwI
▮Marketers look at:
• Economic variables (ex: size of market)
• Population indicates size
• Geographic indicators (useful to know job
growth)
• Migration patterns
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13. Using Geographic Segmentation
▮Demand varies by region
• Focus on core regions, those from which they draw 40
to 80 percent of sale
• Tex-Mex, Cheerwine
▮Residence location within a region is an important
variable
• Coffee, ice cream, public transportation, gardening
▮Provides useful distinctions when regional
preferences or needs exist
• Snow blower, sun block, flood insurance
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14. Geographic Information Systems (GISs)
▮Computer systems that assemble, store,
manipulate, and display data by location
▮Simplifies the job of analyzing geographic
marketing information
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15. Geographic Information Systems (GISs)
▮Number of companies benefit from using a GIS
• Locate new outlets
• Assign sales territories
• Plan distribution centers
• Map out the most efficient delivery routes
Consumers
• Interactive Foursquare
• https://foursquare.com/
• Google
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17. Demographic Segmentation
▮Division of an overall market into
homogenous groups based on:
• Gender and age
• Income and occupation
• Education
• Sexual orientation
• Household size
• Stage in the family life cycle
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18. Segmenting by Gender
▮Lines blurring in recent years
▮Example: Men buying skin-care products
and women buying power tools and trucks
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19. Segmenting by Age
▮Has become blurred as consumers’ roles
and needs change
• Example: St. Joseph’s baby aspirin now
marketed to adults to help prevent heart
disease
▮School-age children have significant
influence over family purchases
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20. Tweens and Teens
▮Influence billions of dollars of family
purchases
▮Marketers could describe this group as
being interactive
▮Companies that target this group have
expanded their product lines
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21. Generation X
▮Born between 1968 and 1979
▮Family-oriented, well educated, and
optimistic
▮Raised on TV, good marketing tool
▮Prefer goods and services that support
certain causes
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22. Baby Boomers
▮Born between 1946 and 1964
▮Popular segment because of their numbers
and income levels
▮Lucrative segment for many marketers
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23. Seniors
▮High discretionary income
▮High rates of home ownership
▮Spend money conservatively, but indulge in
luxury
▮Not likely to be the first to try new products
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24. Segmenting by Ethnic Group
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25. Hispanics and African Americans
▮Largest ethnic/minority groups in U.S.
• Majority-minority counties
▮Hispanic population is growing much faster
than the African American population
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http://www.adweek.com/adfreak/dont-mess-danny-trejo-and-dont-mess-miller-time-153309
http://www.adweek.com/news/advertising-branding/nearly-half-second-
gen-hispanics-feel-ads-dont-target-them-149338

26. Asian Americans
▮Fastest growing segment of the U.S.
population between 2000-2010
▮Fastest-growing income
▮Population is concentrated in fewer
geographic areas than other ethnic markets
• Half live in California, Texas, and New York
▮Very diverse group
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27. Native Americans
▮Current population 5 million, 1.7 percent of
the total U.S. population
▮Businesses are growing
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28. People of Mixed Race
▮The ability to select more than one racial
category on census forms has been recently
introduced
▮About 9 million U.S. residents classify
themselves this way
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29. Segmenting by Family Life Cycle Stages
▮Family lifecycle - Process of family
formation and dissolution
▮Life stage, not age, is primary concern of
marketer
▮Empty nesters may have higher disposable
incomes and spend more on premium items
▮Increase in "boomerangs"—grown children
who have returned home to live with their
parents
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30. Segmenting by Household Type
▮Average household size in U.S. has
decreased from 5.8 in 1790 to less than 3
today
▮U.S. households embody a wide range of
diversity
▮Growing number of same-sex couples who
share households
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31. What is Psychographic Segmentation?
▮Division of a population into groups that
have similar attitudes, values, and lifestyles
• ATTITUDE
• VALUE
• LIFESTYLE
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33. Using Psychographic Segmentation
▮Quantify aspects of consumers’
personalities and lifestyles
▮Plan and promote more effectively
▮Acts as a good supplement to geographic
and demographic segmentation
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34. Product-Related Segmentation
▮Groups based on relationships to a
product/service
• Usage
• Loyalty
• Benefit
• Example: Gyms (look good, feel healthy, weight loss)
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