Phase 1 Market Segmentation Phase 1 Market Segmentation Phase 2 Target Market and Marketing Mix Selection Phase 2 Target Market and Marketing Mix Selection Phase 3 Product/Brand Positioning Phase 3 Product/Brand Positioning

 What Is Market Segmentation?  Bases for Segmentation  Criteria for Effective Targeting of Segments  Implementing Segmentation Strategies Copyright 2007 by Prentice Hall

The process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

 Discover the needs and wants of groups of consumers to develop specialized products to satisfy group needs  Used to identify the most appropriate media for advertising Copyright 2007 by Prentice Hall

 Geographic  Demographic  Psychographic  Sociocultural  Use-Related  Usage-Situation  Benefit Sought  Hybrid

Copyright 2007 by Prentice Hall Table 3.1 Market Segmentation Occupation SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Climate Density of area City Size RegionSouthwest, Mountain States, Alaska, Hawaii Major metropolitan areas, small cities, towns Urban, suburban, rural Temperate, hot, humid, rainy Demographic Segmentation Income Marital status Sex AgeUnder 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Male, female Single, married, divorced, living together, widowed Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over EducationSome high school, high school graduate, some college, college graduate, postgraduate blue-collar, white-collar, agricultural, military

Table 3.1, continued SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychographic Subcultures (Race/ethnic) Religion Cultures (Lifestyle) SegmentationEconomy-minded, couch potatoes, outdoors enthusiasts, status seekers American, Italian, Chinese, Mexican, French, Pakistani Catholic, Protestant, Jewish, Moslem, other African American, Caucasian, Asian, Hispanic Family life cycle Social classLower, middle, upper Bachelors, young married, full nesters, empty nesters Sociocultural Segmentation

Copyright 2007 by Prentice Hall SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Use-Related Segmentation Brand loyalty Awareness status Usage rateHeavy users, medium users, light users, non users Unaware, aware, interested, enthusiastic None, some, strong Use-Situation Segmentation Location Objective TimeLeisure, work, rush, morning, night Personal, gift, snack, fun, achievement Home, work, friend’s home, in-store PersonSelf, family members, friends, boss, peers Benefit SegmentationConvenience, social acceptance, long lasting, economy, value-for-the-money Table 3.1, continued

 The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, state, or city) Copyright 2007 by Prentice Hall SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Geographic Segmentation Climate Density of area City Size RegionSouthwest, Mountain States, Alaska, Hawaii Major metropolitan areas, small cities, towns Urban, suburban, rural Temperate, hot, humid, rainy

 Age  Sex (gradually disappearing)  Marital Status  Income, Education, and Occupation Copyright 2007 by Prentice Hall Occupation Demographic Segmentation Income Marital status Sex AgeUnder 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+ Male, female Single, married, divorced, living together, widowed Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over EducationSome high school, high school graduate, some college, college graduate, postgraduate blue-collar, white-collar, agricultural, military

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 Also known as Lifestyle Analysis  Psychographic variables include  Activities, Interests, and Opinions (AIOs)  Marketers can understand customers’ psychographic profile by understanding their activities, interest and opinions Copyright 2007 by Prentice Hall SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Psychographic (Lifestyle) SegmentationEconomy-minded, couch potatoes, outdoors enthusiasts, status seekers

Copyright 2007 by Prentice Hall Instructions: Please read each statement and place an “x” in the box that best indicates how strongly you “agree” or “disagree” with the statement. I feel that my life is moving faster and faster, sometimes just too fast. If I could consider the “pluses” and “minuses,” technology has been good for me. I find that I have to pull myself away from . Given my lifestyle, I have more of a shortage of time than money. I like the benefits of the Internet, but I often don’t have the time to take advantage of them. [1][2][3][4][5][6][7] Agree Completely Disagree Completely Psychographic segmentation usually is calculated by likert scale

Ideals: Guided by Knowledge and Principle Achievers: Look for product or service that demonstrate success to their peers Self expression: Desire social and physical activity, variety and risk

 Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and are the most receptive to new ideas and technologies. Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services.  Image is important to Innovators, not as evidence of status or power but as an expression of their taste, independence, and personality. Innovators are among the established and emerging leaders in business and government, yet they continue to seek challenges. Their lives are characterized by variety. Their possessions and recreation reflect a cultivated taste for the finer things in life.

 Thinkers are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. They tend to be well educated and actively seek out information in the decision-making process. They are well-informed about world and national events and are alert to opportunities to broaden their knowledge.  Thinkers have a moderate respect for institutions of authority and social decorum but are open to consider new ideas. Although their incomes allow them many choices, Thinkers are conservative, practical consumers; they look for durability, functionality, and value in the products that they buy.

 Like Thinkers, Believers are motivated by ideals. They are conservative, conventional people with concrete beliefs based on traditional, established codes: family, religion, community, and the nation. Many Believers express moral codes that have deep roots and literal interpretation. They follow established routines, organized in large part around home, family, community, and social or religious organizations to which they belong.  As consumers, Believers are predictable; they choose familiar products and established brands. They favor U.S. products and are generally loyal customers.

 Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family. Their social lives reflect this focus and are structured around family, their place of worship, and work. Achievers live conventional lives, are politically conservative, and respect authority and the status quo. They value consensus, predictability, and stability over risk, intimacy, and self-discovery.  With many wants and needs, Achievers are active in the consumer marketplace. Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers. Because of their busy lives, they are often interested in a variety of time-saving devices.

 Strivers are trendy and fun loving. Because they are motivated by achievement, Strivers are concerned about the opinions and approval of others. Money defines success for Strivers, who don't have enough of it to meet their desires. They favor stylish products that emulate the purchases of people with greater material wealth. Many Strivers see themselves as having a job rather than a career, and a lack of skills and focus often prevents them from moving ahead.  Strivers are active consumers because shopping is both a social activity and an opportunity to demonstrate to peers their ability to buy. As consumers, they are as impulsive as their financial circumstance will allow.

 Experiencers are motivated by self-expression. Young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and excitement. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities.  Experiencers are passionate consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis that they place on looking good and having "cool" stuff.

 Like Experiencers, Makers are motivated by self-expression. They express themselves and experience the world by working on it— building a house, raising children, fixing a car, or canning vegetables—and have enough skill and energy to carry out their projects successfully. Makers are practical people who have constructive skills and value self-sufficiency. They live within a traditional context of family, practical work, and physical recreation and have little interest in what lies outside that context.  Makers are suspicious of new ideas and large institutions such as big business. They are respectful of government authority and organized labor but resentful of government intrusion on individual rights. They are unimpressed by material possessions other than those with a practical or functional purpose. Because they prefer value to luxury, they buy basic products.

 Survivors live narrowly focused lives. Because they have few resources with which to cope, they often believe that the world is changing too quickly. They are comfortable with the familiar and are primarily concerned with safety and security. Because they must focus on meeting needs rather than fulfilling desires, Survivors do not show a strong primary motivation.  Survivors are cautious consumers. They represent a very modest market for most products and services. They are loyal to favorite brands, especially if they can purchase them at a discount.

 Family Life Cycle  Social Class  Culture, Subculture, and Cross-Culture SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Subcultures (Race/ethnic) Religion CulturesAmerican, Italian, Chinese, Mexican, French, Pakistani Catholic, Protestant, Jewish, Moslem, other African American, Caucasian, Asian, Hispanic Family life cycle Social classLower, middle, upper Bachelors, young married, full nesters, empty nesters Sociocultural Segmentation

Copyright 2007 by Prentice Hall Video cameras are often purchased by young couples with children.

 Rate of Usage  Heavy vs. Light  Awareness Status  Aware vs. Unaware  Brand Loyalty  Brand Loyal vs. Brand Switchers Copyright 2007 by Prentice Hall SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES Use-Related Segmentation Brand loyalty Awareness status Usage rateHeavy users, medium users, light users, non users Unaware, aware, interested, enthusiastic None, some, strong Use-Situation Segmentation Location Objective TimeLeisure, work, rush, morning, night Personal, gift, snack, fun, achievement Home, work, friend’s home, in-store PersonSelf, family members, friends, boss, peers Benefit SegmentationConvenience, social acceptance, long lasting, economy, value-for-the-money

 Segmenting on the basis of special occasions or situations  Example Statements:  Candies on Valentine’s Day  Flowers on Pahela Baishakh  Sending more sms on the day before Eid Copyright 2007 by Prentice Hall

 Segmenting on the basis of the most important and meaningful benefit  Ex: LG G4 Copyright 2007 by Prentice Hall

Band-aid offers “flex” as a benefit to consumers.

 Identifiable  Sizable  Stable  Accessible Copyright 2007 by Prentice Hall

 Behavioral targeting:  Provide personalized advertising message based on individual usage behavior  Through Web browsing  Microtargeting  Aggregating individual consumers into relatively small groups based on data available about them from many different databases and targeting them with tailor made messages  Messages transmitted via narrowcasting  Through , mobile, door to door Copyright 2007 by Prentice Hall

 Concentrated Marketing  Target one segment with unique marketing mix  Primarily for small or new companies  Also appropriate for final stage PLC products when the products are fading out from the market  Differentiated  Targeting several segments with individual marketing mix  Mainly for companies having better financial condition/stability  Soft drinks, detergents Copyright 2007 by Prentice Hall