Segmentation, Targeting, and the Marketing Mix Chapter 04 McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives LO1: Explain the role of advertising in facilitating satisfying exchanges. LO2: Illustrate the various methods advertisers use to segment and aggregate consumer & business markets. LO3: Discuss how defining a target market enhances a product’s marketing strategy. LO4: Describe the elements of the marketing mix & the role advertising plays in each element of the mix. 4-2

Marketing Context of Advertising Exchange – Marketing creates exchanges to satisfy the perceived needs & wants of individuals & organizations. A product’s need-satisfying ability is called its utility Research can discover the market’s needs & wants. – Post-exchange satisfaction is important. Advertising can reinforce that satisfaction. 4-3

The Market Segmentation Process Market Segmentation – Identify groups of people or organizations based on shared characteristics, as well as needs and wants. – Aggregating the groups into larger segments large enough to target & reach through a marketing mix 4-4

The Market Segmentation Process Types of Markets – Consumer Markets directed at consumers, this is most of the advertising we see on a daily basis in mass media – Business Markets Business-to-Business marketing targets those who make purchases for business and rarely uses mass media can be further segmented into Trade, Professional, & Agricultural 4-5

The Market Segmentation Process Segmenting the Consumer Market – Four ways to segment behavioristic geographic demographic psychographic 4-6

The Market Segmentation Process Aggregating Market Segments – Segment & select specific segments with shared characteristics and potential interest in the product/service – Reorganize & combine into larger segments 4-7

The Target Marketing Process Target Market Selection – One or more segments makes a target market Those consumers the company wishes to appeal to, design products for and tailor its marketing activities toward. 4-8

The Target Marketing Process The Marketing Mix The way a company mixes & blends different marketing elements to create a marketing strategy – Product: What’s being marketed? – Price: How will you price it? Why? – Place: How will you move it, Where will you sell it? – Promotion: How will we tell customers about it? 4-9

Advertising & the Product Element Product Life Cycles – Introduction – Growth – Maturity – Decline 4-10

Advertising & the Product Element Product Positioning & Differentiation – Positioning how is the product perceived in the marketplace – Differentiation creating a difference in the product that helps it appeal to a market segment 4-11

Advertising & the Product Element Product Branding – Individual Brand, Family Brand, Private Label The Role of Branding – Recognition & Identification – Differentiation – Loyalty & Equity – Value 4-12

Advertising & the Product Element Product Packaging – The marketer’s last chance to communicate and promote – Four Considerations: identification containment, protection and convenience consumer appeal economy 4-13

Advertising & the Promotion Element Marketing Communications (marcom) – Advertising – Personal Selling – Sales Promotion – Direct Marketing – Public Relations 4-14