Dr. Bea Bourne 1

2 If you have any trouble in seminar, please do call Tech Support at: They can assist if you get “bumped” from the seminar room or experience other difficulties.

 This seminar will examine the criteria for effective targeting of market segments.  The following criteria will be discussed: ◦ identifiable, sufficient, stable or growing, and accessible.  Maslow's hierarchy of needs.  Virtual Field Trip  Questions 3

 Unit 3 focuses on market segmentation and consumer motivation.  It is important to understand how and why market segmentation is used, as well as what motivates consumers when making purchasing decisions.  Consumers' needs are the basis for marketing and this unit provides insight into these needs. 4

5 Read Chapters 3 & 4 Chapter 3 introduces effective targeting of market segments. As you read, you should pay particular attention to the criteria for effective targeting of market segments. Chapter 4 introduces consumer motivation. As you read, you should pay particular attention to Maslow's hierarchy of needs: Physiological needs Safety and security needs Social needs Egoistic needs Self-Actualization needs

 Unit 2provided an overview of consumer behavior and consumer research.  It is important to note the impact that the digital revolution has had on the marketplace by allowing much greater customization of products, services, and promotional messages than older marketing tools. 6

7 After completing this unit, you should be able to: Define market segmentation Explain the nine major categories of consumer characteristics used to segment markets Comprehend the family life cycle concept Analyze the criteria for targeting a market segment Define consumer motivation Explain the steps of the arousal stimulus process

8 Maslow’s Hierarchy of Needs Theory ://staff.gc.maricopa.edu/~jpell/blackboard/MASLOW.JPG&imgrefurl

9 From your perspective, why is studying Maslow's hierarchy of needs important as a marketer?

10 By studying the Hierarchy of Needs marketers will find new perspectives when creating marketing campaigns. You will gain insight and understanding on what motivates customers to buy. In the end, this will help increase a marketing campaign’s return on investment (ROI). Let's talk through the 5 needs in Maslow's hierarchy.

As a consumer, what are physiological needs? 11

12 Physiological needs fulfill basic needs such as hunger and thirst. What types of products might be developed for customers in this phase?

 When Physiological needs have been met consumers move up to the next stage of the hierarchy, safety needs.  What do Safety needs include?  What types of products might be developed in this phase? 13

 Social needs come in the next level of the hierarchy.  This is the need to belong or be loved.  Are there products or services developed for this need? 14 Social needs

 What are esteem needs?  Esteem need is the need for status and recognition within society.  Status sometimes drives people, the need to have a good job title and be recognized or the need to wear branded clothes as a symbol of status.  What are some other products developed for this need? 15

 The last need on Maslow's hierarchy is self actualization.  Self-actualization is the realization that an individual has reached their potential in life. 16

17 Why do you think it is important for us as marketers to understand the Maslow’s Hierarchy of Needs? Maslow’s Hierarchy of Needs provides a useful foundation for us to work from when we try to gauge what set of needs our target audience is apt to be searching for. In other words, it helps us understand consumer needs and wants.

18 In Unit 2 we defined market segmentation as the process of dividing a market into distinct subsets of consumers with common needs and/or characteristics. Can anyone provide an example of how markets can be segmented?

 Markets can be segmented geographically, demographically, psychologically, by social culture.  To be effective segmentation should be identifiable, sufficient, stable or growing, and accessible.  As discussed earlier, to divide the market into separate segments on the basis of a series of common or shared needs or characteristics a marketer must be able to identify these relevant characteristics 19

 Marketers are not likely to use just one segment variable  Market segments often combine multiple variables together to create a desirable target segment  Which variables might be combined to create a segment for- ◦ Harley Davidson Motorcycles/ ◦ Prada Shoes? 20

21 1. Measurable- Must be quantifiable 2. Accessible- You must be able to reach them 3. Substantial- Must be large enough so company benefits 4. Differentiable- Segment must respond differently 5. Actionable- Company must be capable of marketing to identified segments What are some ways we can identify these common characteristics? Surveys and questionnaires are a great way to do this. When we talk about market segmentation being sufficient, what do you think we are talking about?

22 For a market segment to be worth targeting it must consist of a sufficient number of people wanting the product or service. For example, you don't find eight track players being marketed any more. Not only has technology advanced, there is no consumer demand for such a device. Stability is in reference to the consistency of the market being targeted. Most marketers prefer to target consumer segments that are relatively stable in terms of demographic and psychological factors. For example, teens are an easily identifiable market. Typically, they are eager to buy, able to spend and easily reached. As marketers, what are some channels that we can use to reach market segments? Television, magazines, and the Internet are a few good one. Segmentation Criteria

We will leave seminar for 4 minutes. Let’s synchronize our watches! During the fieldtrip, you will visit the site, view the information, learn about the segmentation. We’ll come back to seminar in 4 minutes to discuss what we’ve learned. 23

24 Lets take a look at a good example of Social considerations for bottle water. Is everyone ready? Buckle up! Ok! Let’s go! I’ll see you back here in 4 minutes.  Visit the following site:

25 25 What makes it okay to charge such high prices for bottled water? Who is the target market for Bling H2o? What need on Maslow's hierarchy of need does this fill? How is the product positioned?

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27 Complete the Project: Watching M&Ms Grow Complete Question 1 for Case One: Watching M&Ms Grow for Chapter 3, which starts on page C-7 in the back of your Consumer Behavior textbook. As with all material you submit to the Instructor, check for correct spelling, grammar, punctuation, mechanics, and usage. Please refer to the Online Communications Guidelines for Paper Submission Standards. Assignment Checklist: Discuss three basic types of research of design (exploratory, descriptive and casual). Discuss use of research design for each method. Differentiate appropriate research design methods to use in consumer habits analysis. Directions for Submitting Your Project Before you submit your project, you should save your work on your computer in a location and with a name that you will remember. Make sure your project is in the appropriate format (Word, Excel, PowerPoint, or other), then, when you are ready, you may submit on the Dropbox page. Assignments

 I appreciate your time and attention during our 1 hour seminar today. If you have questions, feel free to contact me: and I’ll be happy to help!  See you in Class! 28