2. Mass-marketing
A strategy that presumes there is one
undifferentiated market and that one
product will appeal to all consumers in that
market.
3. Advantages
Lower cost
One advertising campaign is needed
One marketing strategy is developed
Usually only one standardized product is
developed
4. Disadvantage
It only works if all consumers have the same
needs, wants, desires, and the same
background, education and experience
5. Market matching strategy
Today, mass marketing has largely been
replaced by a three-step market matching
strategy
7. Market Matching Strategy
Segmentation
Act of dissecting the marketplace into submarkets
that require different marketing mixes
Targeting
Process of reviewing market segments and deciding
which one(s) to pursue
Positioning
Establishing a differentiating image for a product or
service in relation to its competition
8. Market segmentation
The process of dividing a market into distinct
subsets (segments) of consumers with
common needs or characteristics and
selecting one or more to target with a distinct
marketing mix
10. Marketers may use a single variable
Marketers may use two or more variables
11. Geographic Segmentation
Division of the market based on the location of the
target market
People living in the same area have similar needs
and wants that differ from those living in other areas
Climate
Population density
Taste
Micromarketing
12. Demographic Segmentation
Partitioning of the market based on factors
such as
age
gender
marital status
income
occupation
education
ethnicity
15. Cohort Effects
Based on the idea that people hold onto the
interests they learned to appreciate growing
up
16. Gender
Gender is frequently a distinguishing variable
Changes in the family and growth of the dual-
income household have blurred some of the
lines
17. Marital Status
Marketers have identified specific marital
status groups, such as:
1. Singles
2. Divorced individuals
3. Single parents
4. Dual-income married couples
They then market products specifically
designed for one or more groups
18. Income, Education & Occupation
These three variables are often related and
therefore often used together as a measure
of one’s social class.
Income is commonly used because
marketers feel it is a strong indicator of ability
to pay for a particular product or service
Income is often combined with other
variables to narrow target markets:
With age to identify the important affluent elderly
With age and occupation to produce the yuppie
segment
19. Race and Ethnicity
The size and purchasing power of minorities
make them an attractive target market
The size of the market is growing
dramatically relative to the “majority”
population
Targeting certain products (e.g., alcohol,
tobacco) to such groups raises ethical issues
20. Tobacco and the African American
Community
Why is there a concern about targeting
African Americans?
During the ’90s, youth smoking rates
increased sharply
12.6% in 1991
22.7% in 1997
80% increase
21. After Native Americans, African Americans
have the highest rate of smokers of any
ethnic group in the US
African American men have the highest rate
of death from lung cancer of any ethnic group
in the US
81% of African American men who smoke and
contract lung cancer die
51% of white men who smoke and contract lung
cancer die
22. Tobacco companies have clearly targeted African Americans
Brown & Williamson’s Kool brand
used a cartoon character, the penguin Willie, that was popular
with black teens
Has sponsored an annual jazz festival that attracts large black
audiences
In 1998 cigarette advertisements represented 60% of ad space in
black newspapers
Following the success of the movie “Malcolm X”, Star Tobacco
Co. introduced a new brand called “X,” packaged in the black,
red and green colors of the black nationalist movement
Marketed in 20 states before pressure from the community forced
discontinuance of the brand
23. Geodemographic Segmentation
A hybrid segmentation scheme
Based on notion that people who live close to one
another are likely to have similar financial means,
tastes, preferences, lifestyles and consumption
habits
24. Market research firms specialize in producing
computer-generated geodemographic market
“clusters” of consumers
They have clustered the nation’s >250,000
neighborhoods into lifestyle groupings based on
postal zip codes
Marketers use the cluster data for mail campaigns,
to select retail sites and merchandise mixes, to
locate banks and restaurants, etc.
“You Are Where You Live”.
25. Psychographic Segmentation
Partitioning of the market based on lifestyle
and personality characteristics
Marketers use it to further refine a target
market
Its appeal lies in the vivid and practical
profiles of consumer segments that it can
produce
Accomplished by using AIO inventories
26. AIO Inventories
AIO research seeks consumers’ responses to
a large number of statements that measure
Activities
Interests
Opinions
27. Examples of the use of psychographic
segmentation reflected in marketing
messages
Kellogg’s targets health-conscious
consumers with brands such as Special K
and Product 19
Old Spice is targeting the active sports
lifestyle with High Endurance deodorant
29. Behavioral segmentation can be done on
the basis of:
1. Usage rate
2. Benefits sought from a product
3. Loyalty to a brand or a store
30. 1. Usage Rate
Differentiates between
heavy users
medium users
light users
nonusers
In general, a relatively small number of heavy
users account for a disproportionately large
percentage of product usage
Targeting those heavy users is a common
marketing strategy
31. 2. Benefit Segmentation
Marketers constantly attempt to identify the
single most important benefit of their product
that will be the most meaningful to
consumers
Changing lifestyles play a major role in
determining the product benefits that are
important to consumers and also provide
marketers with opportunities for new products
and services
32. 3. Brand and Store Loyalty
The tendency of some consumers to
repeatedly select the same brand within a
given product category
A parallel tendency of some consumers to
repeatedly patronize a particular retail
establishment
33. Marketers often try to identify the
characteristics of their brand-loyal customers
so they can target consumers with similar
characteristics in the larger population
Marketers also target consumers who show
no brand loyalty as a means of penetrating a
larger market
Marketers reward brand loyalty by offering
special benefits to frequent customers
34. Choosing Market Segments to Target
Once an organization has identified its most
promising market segments, it must decide whether
to target one segment or several segments
Each targeted segment will then receive a specially
designed marketing mix — i.e., a specially tailored
product, price, distribution network and/or
promotional campaign
35. Market Targeting Strategies
There are three basic types of strategies:
1. Undifferentiated
2. Multisegment (Differentiated)
3. Concentration (Niche)
36. 1. Undifferentiated Strategy
A strategy that ignores differences between
groups within a market and offers a single
marketing mix to the entire market
It works when a product is new to the market
and there is minimal or no competition
37. Advantages and Disadvantages
Economies in production and marketing
Vulnerability to competitors offering more
differentiated products and services to market
subsegments
39. Advantages and disadvantages
Minimizes risks, as losses in one segment
can be made up for in others
Unique product features allow for higher
prices
Increased costs for differentiated products
and marketing
41. Greater knowledge of customers’ needs
Economies of scale
Entry of a strong competitor
Change in size or tastes of the segment
42. Positioning
Deciding how the firm wants the company and
its brands to be perceived and evaluated by
target markets
Differentiating the product from other products of
the firm or its competition
43. Positioning complements and is an integral
part of the company’s segmentation strategy
and selection of target markets
The same product can be positioned
differently to different market segments
The result of successful positioning is a
distinctive brand image on which consumers
rely in making product choices
44. Perceptual Mapping
A spatial picture of how consumers view
products or brands within a market
Allows marketers to determine how their
product appears in relation to competitive
brands
Enables them to see gaps in in positioning of
all brands in the product class to identify
areas in which consumer needs are not being
met
45. A visual profile of how consumers perceive a number of pain
relievers on the two dimensions of effectiveness vs. gentleness.
Effectiveness
Tylenol
Extra-Strength Tylenol
Bufferin
Nuprin
Motrin Advil
Anacin
Bayer
Excedrin
Private Label Aspirin Aleve
Orudis
Actron
Gentleness to Stomach More
Less
More
47. Modifying an existing brand
Targeting it to a new market segment
Emphasizing new product uses and benefits
Stressing different features with the intention
of boosting sales
48. Selected Psychographic/Demographic Characteristics
of the PC Magazine Subscriber
Source: 1997 Lifestyles Study, PC Magazine Subscriber Study, Ziff-Davis, Inc., June 1997.
DEMOGRAPHICS Percent
SEX (BASE 990)
Men 86
Women 13
PSYCHOGRAPHICS Percent
USE A COMPUTER 100
At home 96
At work 89
On vacation/traveling 46
AGE
Under 25 5
25 - 34 18
35 - 44 29
45 - 54 31
55 - 64 12
65 or older 5
Mean age 44.1
SELECTED USE OF
COMPUTER
Word Processing 96
Connect to Internet 86
E-mail 84
For work 80
Accounting/record keeping 75
Reference 68
Recreation/games 66
49. DEMOGRAPHICS Percent PSYCHOGRAPHICS Percent
EDUCATION
Some college or less 27
Graduate college 27
Education beyond
college graduate 46
EMPLOYMENT STATUS
Employed by someone else 68
Self-employed 21
Other 11
PORTABLE DEVICES USED
WHEN TRAVELING ON
BUSINESS
Laptop/notebook
computer 57
Cellular phone 47
Beeper or pager 30
Personal Digital Assistant/
electronic organizer 14
50. DEMOGRAPHICS Percent PSYCHOGRAPHICS Percent
OCCUPATION/BUSINESS
DEPT.
Computer related-
professional 22
Senior or corporate
management 16
Engineering-related
professional 13
Administrative/
manufacturing,
accounting, finance,
purchasing, advertising,
marketing, sales 26
Others 23
TRAVEL FOR
BUSINESS/PLEASURE
Business Travel
5 or more days per month 31
5 or more nights away
from home per month 17
Pleasure/Vacation Travel
15 or more days per year 37
Mean number of days
per year 15.5
MEMBER OF
FREQUENT FLYER
PROGRAMS 90
51. DEMOGRAPHICS Percent PSYCHOGRAPHICS Percent
INCOME
Under $30,000 7
$30,000 - $49,999 15
$50,000 - $74,999 24
$75,000 - $99,999 19
$100,000 or more 24
Mean income $87,700
PRIMARY RESIDENCE
Own 74
Rent 18
Other 3
No answer 5
FINANCIAL SERVICES
Currently own
Mutual funds 48
Stocks 44
Bonds 24
Life insurance/annuities 44
Currently use
Brokerage services 36
On-line investment
services 16
Retirement/financial
planning 41
52. RESPONSE OF SELECTED
CONSUMER
PSYCHOGRAPHIC
STATEMENTS Percent
Research before choose
brand of new product
to buy 41
Other people ask my opinion
about which computer
products to buy 41
Usually buy products based
on quality, not price 26
Prefer products that are
latest in new technology 26
Among group I am one of
first to try new product 19
Walking/running/jogging 63
Exercise/fitness/weight
training 44
Bicycling 7
Swimming 37
Golf 27
Fishing 23
Boating/sailing 19
Skiing 19
Tennis 14
SELECTED
SPORTS/ACTIVITES
PLAYED/PARTICIPATED IN
PAST YEAR Percent
53. Listen to music 77
Reading 61
Going to movies 60
Surfing the Internet 50
Games-videos on
computer 48
Gardening 32
Going to the theater 32
Cooking 30
Photography 30
Collecting stamps/coins 11
Sewing needlecraft 6
HOBBIES/OTHER ACTIVITIES
PARTICIPATED IN Percent
