Segmentation, Targeting and the Marketing Mix Introduces the people and groups who work in advertising Chapter Title

Chapter 4 Objectives Describe the role of marketing in creating satisfying exchanges Explain the role of advertising in communicating a product’s utility Identify the various methods advertisers use to segment and aggregate consumer and business markets Discuss how target marketing affects the firm’s advertising strategy Explain the purpose and importance of branding Describe the elements of the marketing mix and the role of advertising in the mix

The Larger Marketing Context of Advertising

Context of Advertising: Marketing Key Concepts Utility Utility Awareness Attitude Interest Exchanges Perception Satisfaction Customer’s Seller’s

The Market Segmentation Process 1. Identify people with shared needs and characteristics

The Market Segmentation Process 1. Identify people with shared needs and characteristics 2. Aggregate these groups into market segments according to their mutual interest in the product’s utility

Types of Markets Two Types Consumer Business

Market Segmentation Behavioristic User-Status Variables Sole Users Semi-Sole Users Discount Users Aware Nontriers Trial/Rejectors Repertoire Users Usage-Rate Variables Volume Segmentation Purchase-Occasion Variables Benefits-Sought Variables Benefit Segmentation

Market Segmentation This Crate and Barrel ad targets sole users and repertoire users

Market Segmentation Heavy users: Hardee’s ad marketing the Thickburger

Market Segmentation Behavioristic Geographic Demographic User Status Variables Purchase-Occasion Variables Benefits-Sought Variables User-Rate Variables User Status, User Rate, Purchase Occasion, & Benefits-Sought Variables Geographic Demographic

Market Segmentation Demographic segmentation: Hispanic ad spending growth by medium

Market Segmentation Demographic segmentation: Heavy usage patterns of various age groups

Market Segmentation Behavioristic Geographic Demographic Psychographic User Status, User Rate, Purchase Occasion, & Benefits-Sought Variables Behavioristic Geographic Demographic Geodemographic Segmentation Psychographic VALS MindBase BehaviorGraphics

Market Segmentation Psychographic segmentation: VALS

Market Segmentation Psychographic segmentation: Adidas placed ads along the Boston Marathon route to target young people who define themselves by their athletic achievements Insert left panel of Adidas ad (p. 180) (ritual/shock/denial/isolation ad panel) Position = 2.9” horizontal, 1.5” vertical Size = 2.8”wide Resolution = 300 dpi Insert right panel of Adidas ad (p. 180) (affirmation/despair/renewal ad panel) Position = 5.9” horizontal, 1.5” vertical Size = 2.8” wide Resolution = 300 dpi

Market Segmentation: Business, Government, & Industry Fewer, more- concentrated buyers Differences from Consumer Markets Complexity: Manufacturers, Resellers, Brand Partnerships Organizational buying behavior

Market Segmentation: Business, Government, & Industry The NAICS hierarchy and codes can be used to search for prospective clients

The Target Marketing Process 1. Select a target market from the market segments identified 2. Use the 4Ps of the marketing mix to shape a product concept for the market Product Price Place Promotion

Target Market Selection Land Rover ad appeals to customers who want both safety and function

Positioning & Differentiation The Product Element Life Cycle Classification Positioning & Differentiation Branding Packaging Introduction Growth Maturity Decline Tangible Goods Equipment- based services People- based services Perceptible Hidden Induced Individual Family National Private Label Licensed Identification Containment Protection Convenience Consumer appeal Packaging can pay for itself Insert ex. 6.11, p. 188 Product life cycle curve Position = 2.66” horizontal, 1.26” vertical Size = 5.84” WIDE Resolution = 300 dpi

Positioning & Differentiation The Product Element Life Cycle Classification Positioning & Differentiation Branding Packaging Introduction Growth Maturity Decline By market By rate of consumption By tangibility By buying habits By physical description Perceptible Hidden Induced Individual Family National Private Label Licensed Identification Containment Protection Convenience Consumer appeal Packaging can pay for itself

Positioning & Differentiation The Product Element Life Cycle Classification Positioning & Differentiation Branding Packaging Introduction Growth Maturity Decline By market By rate of consumption By tangibility By buying habits By physical description Perceptible Hidden Induced Individual Family National Private Label Licensed Identification Containment Protection Convenience Consumer appeal Packaging can pay for itself

The Product Element Jeep positions itself as the “only one” to go anywhere on the planet

Positioning & Differentiation The Product Element Life Cycle Classification Positioning & Differentiation Branding Packaging Introduction Growth Maturity Decline By market By rate of consumption By tangibility By buying habits By physical description Perceptible Hidden Induced Individual Family National Private Label Licensed Identification Containment Protection Convenience Consumer appeal Packaging can pay for itself

The Product Element World’s most valuable brands

Positioning & Differentiation The Product Element Life Cycle Classification Positioning & Differentiation Branding Packaging Introduction Growth Maturity Decline By market By rate of consumption By tangibility By buying habits By physical description Perceptible Hidden Induced Individual Family National Private Label Licensed Identification Containment Protection Convenience Consumer appeal Packaging can pay for itself

The Price Element Price Factors: Demand Corporate Goals & Strategies Production & Distribution Competition

The Place (Distribution) Element Direct Network Buyer Club Indirect Intensive Selective Push/Pull Exclusive

The Promotion Element Marketing Communication Types Direct Marketing Sales Promotion Product Advertising Personal Selling Public Relations