Segmentation Laura Connor, Tony Hanson, Ryan Loder, Suyi Ma

Agenda Social influences Major kinds of segmentation Requirements of a segment Key steps of segmenting

Agenda Social influences Major kinds of segmentation Requirements of a segment Key steps of segmenting

Social influence When emotions, opinions or behaviors are affected by others

Types of social influence Kelman’s varieties  Compliance  Identification  Internalization Conformity Minority Self-fulfilling Reactance Obedience Persuasion

Kelman’s varieties Herbert Kelman identified three broad varieties of social influence: Compliance Identification Internalization

The point: instigate action cause change

When influence causes change Positive vision Fear Pain Ultimatums Goal alignment Care Knowledge and ability Rewards

When influence does not cause change Vision Being unaware They don’t see the benefit It’s not their goal Short-term rewards

Influence We are being constantly influenced Minds are moved by forces we cannot always see The scarcity of original thought

Agenda Social influences Major kinds of segmentation Requirements of a segment Key steps of segmenting

Major kinds of segmentation Group potential buyers into Segments by :  Demographics (Age, income, education, income etc.)  Geographic ( Climate, region, city size etc.)  Northeast  Mid-Atlantic  North-Central  Southwest  Northwest  Socio-cultural  Culture and Subculture  Social Class  Religion

Major kinds of segmentation Group potential buyers into Segments by:  Psychographic  Lifestyles  Attitudes  Personality  Behavioral  Usage Rates or Frequency  Product Features  Loyal  Benefits Sought  Benefits customers are seeking when they purchase a product.

What do you value most about a phone? Phone calls Texting Camera Social Media s E-book YouTube viewer Games Music Web browser Weather Voice dictation Personal assistant Alarm clock, stopwatch, timer Calculator Calendar Note taker Photo album GPS navigation Flashlight Dictionary Compass Voice Recorder Magnifying glass and mirror Language translator Retail store finder

Phone Activity Phone Calls Texting Web Browsing s

Agenda Social influences Major kinds of segmentation Requirements of a segment Key steps of segmenting

Three Reason to Segment Market Segmentation enables the identification of groups of customers with similar needs, and the analysis of the buying behavior of these groups. Segmentation provides information for the specific matching of the design of marketing mixes with the characteristics of the segment. Segmentation helps marketers satisfy customers wants and needs while meeting the organization’s objectives.

Requirements of a Segment In addition to having different needs, for segments to be practical they should be evaluated against the following criteria: Substantiality: the segments should be sufficiently large to justify the resources required to target them. A very small segment may not serve commercial exploitation. Identifiably: The differentiating attributes of the segments must be measurable so that they can be identified. Reachability: The segments must be reachable through communication and distribution channels.

Requirements of a Segment (Cont....) Responsiveness: Unless segment responds to a marketing mix differently, no separate treatment is needed. Unique needs: To justify separate offerings, the segments must respond differently to the different marketing mixes. Durable: The segments should be relatively stable to minimize the cost of frequent changes.

Agenda Social influences Major kinds of segmentation Requirements of a segment Key steps of segmenting

Key Steps of Segmenting & Targeting Markets The Five Key Steps in Segmenting and Targeting Markets 1.Group potential buyers into segments Link Needs To Actions

Key Steps of Segmenting & Targeting Markets Group potential buyers into Segments by :  Demographics (Age, income, education, income etc.)  Geographic ( Climate, region, city size etc.)  Northeast  Mid-Atlantic  North-Central  Southwest  Northwest  Socio-cultural  Culture and Subculture  Social Class  Religion

Key Steps of Segmenting & Targeting Markets Group potential buyers into Segments by:  Psychographic  Lifestyles  Attitudes  Personality  Behavioral  Usage Rates or Frequency  Product Features  Loyal  Benefits Sought  Benefits customers are seeking when they purchase a product.

Key Steps of Segmenting & Targeting Markets The Five Key Steps in Segmenting and Targeting Markets 1.Group potential buyers into segments 2.Group products sold into categories Link Needs To Actions

Key Steps of Segmenting & Targeting Markets  Group products sold into categories  Target Marketing  What it is they are buying and who is doing the buying.  Strategy into what market segment to enter.  Marketing Positioning  Unique Product that your target customers values

Key Steps of Segmenting & Targeting Markets The Five Key Steps in Segmenting and Targeting Markets 1.Group potential buyers into segments 2.Group products sold into categories 3.Develop a market-product grid and estimate size of markets Link Needs To Actions

Key Steps of Segmenting & Targeting Markets  Develop a market-product grid and estimate size of markets  To determine business growth strategies

Key Steps of Segmenting & Targeting Markets The Five Key Steps in Segmenting and Targeting Markets 1.Group potential buyers into segments 2.Group products sold into categories 3.Develop a market-product grid and estimate size of markets 4.Select target markets Link Needs To Actions

Key Steps of Segmenting & Targeting Markets Select target markets  Two types of criteria  Those that divide a market into segments  Those that pick the segment  How does a company choose a target market  Competitive position (low cost, differentiation etc.)  Opportunities within this segment  Meet its goals and objectives  Cost

Key Steps of Segmenting & Targeting Markets Select target markets  Perceptual Maps  How do customers see their vehicle

Key Steps of Segmenting & Targeting Markets The Five Key Steps in Segmenting and Targeting Markets 1.Group potential Buyers into segments 2.Group products sold into categories 3.Develop a market-product grid and estimate size of markets 4.Select target markets 5.Take marketing actions to reach target markets Link Needs To Actions

Key Steps of Segmenting & Targeting Markets Take marketing actions to reach target markets TAKE ACTION TO REACH YOUR TARGET MARKET !!

Questions?