1. Market Segmentation

2. Market Segmentation
Definition of a Target Market: A sub-group of a larger market chosen as the focal point for a marketing or advertising campaign.

3. Market Segmentation
The identification of specific portions of a market and targeting them with specific advertising messages is called market segmentation.
Market segmentation divides the pool of potential customers into segments.

4. The STP Marketing Process (Segmenting, Targeting, Positioning)
Break the market into smaller, more homogenous segments
Specifically target the discrete market segments
Position the product or service to appeal to the targeted segments

5. Identifying Target Segments: Market Segmentation
Geography
Demographics
Psychographics
Lifestyles
Commitment Levels
Benefits
Usage Patterns

6. Demographic Segmentation
Age
Gender
Race
Marital Status
Income
Education
Occupation

7. How would you describe the demographic segment targeted by this advertising campaign?

8. How about this ad? What is the target demographic for this ad campaign?

9. Geographic Segmentation

10. Psychographics and Lifestyle Segmentation
Activities
Lifestyle
Opinions
Lifestyle segmentation provides insight into consumer’s motivations
Interests

11. One Psychographic Segmentation System

12. Self Orientation--What gives shape, substance, character to consumers’ identities
Resources--Physical, psychological, material, social means at consumers’ disposal

13. MAKERS
practical; self-sufficient; like to work with their hands; value things with a functional purpose such as tools and utility vehicles; tend to hunt and fish more than the general population.

14. ACHIEVERS
conventional; politically conservative; social lives revolve around family, church and career; work provides status, material success and sense of duty; tend to own swimming pools.

15. EXPERIENCERS
young, enthusiastic, seek variety and excitement; into sports and social activities; spend money on fast food, clothes, movies, music; likely to have attended rock concert in past year.

16. STRIVERS
money defines success; concerned about opinions of others; trying to find their place in life but may feel unsure of themselves; want to be stylish and own high-status possessions.

17. ACTUALIZERS
successful, affluent, active, high self-esteem, interested in expressing themselves in different ways; often leaders yet seek new challenges; tendency for foreign travel, dinner parties and the arts.

18. STRUGGLERS
poor, elderly, low education, concerned about health, cautious; may feel resigned and passive about life; worried about security and safety; may not buy much but are loyal to their favorite brands.

19. BELIEVERS
conventional, conservative, predictable; strong, fixed beliefs and rules of conduct about church, family, community and nation; modest incomes and education but sufficient to meet their needs.

20. FULFILLED
mature, reflective; well educated, well informed and value knowledge; professional occupations; while respecting order, also open to new ideas and change in society; want durability and functionality in what they buy.

21. Segmenting by Usage and Commitment
Advertising targeted to:
Heavy users
Nonusers
Brand-loyal users
Switchers/Variety seekers
Emergent Consumers

22. Benefit Segmentation
Passenger Safety?
Prestige?
Fuel Economy?

23. What psychographic grouping do you think this ad is aimed at?

24. TARGET MARKET?

25. TARGET MARKET?

26. TARGET MARKET?

27. TARGET MARKET?

28. PART 2: CONSUMER BEHAVIOR
WE NOW KNOW WHO THEY ARE.
BUT WHAT MOTIVATES THEM?

29. CONSUMER BEHAVIOR
TO INFLUENCE CONSUMERS, WE NEED TO KNOW WHAT MOTIVATES THEM
-PSYCHOLOGICAL FACTORS
NEEDS AND WANTS
PERCEPTIONS
ATTITUDES, VALUES
-SOCIAL FACTORS
CULTURE
SUB-CULTURE
FAMILY, PEERS

30. Different Views of What Causes Motivation
Biological Vs. Learned Needs
Drive Theory (degree of push)
Expectancy Theory
(degree of pull)
Focuses on Biological Needs that Produce Unpleasant States of Arousal, i.e. Hunger.
Homeostasis: Behavior Which Tries to Reduce or Eliminate This Unpleasant State and Return to Balance.
Behavior is Largely Pulled by Expectations of Achieving Desirable Outcomes (a Positive Outcome or Absence of Negative) - Pulled Toward the Outcome

31. Two Dimensions of Motivation
Motivational Intensity or Strength:
The amount of push or pull that motivation exerts on an individual (e.g., amount of tension, consequences, immediacy). The Degree to Which a Person is Willing to Expend Energy to Reach One Goal as Opposed to Another.
Motivational Direction:
Particular way a consumer attempts to reduce motivational tension (eg. how to become wealthy)

32. Motivational Direction: Goal Directed Behavior
Positive
Approach
e.g., Work out to look and feel healthy
Negative
Avoidance
e.g., Work out to avoid being stigmatized socially

33. Motivational Direction: Needs vs. Wants
The specific Way a Need is Satisfied, depends on
Individual’s Unique History, Learning Experiences
and Cultural Environment.
Needs
Needs are more fundamental than wants
e.g., How to satisfy hunger? How to relieve boredom? How to
get interest of sexually attractive person?
Motivational Direction: Needs vs. Wants

34. Motivational Direction
Four Types of Needs
Motivational Direction
Biogenic
Psychogenic
Utilitarian
Hedonic

35. Marketers Tend to Focus on Psychogenic Needs
Need for Achievement
Value personal accomplishment
Need for Affiliation
Desire being in the company of other people
Need for Power
Control one’s environment
Need for Uniqueness
Desire to assert one’s individual identity
Examples of products focused on these needs?

36. Another Model of Needs: Maslow’s Hierarchy - Holds that Needs Evolve as Society or a Consumer Develops
Self
Actualization
Esteem
Social
Safety
Physiological

37. Values--Identify What is Good and Desirable
Values are higher level motives that tell us how desirable a given goal is (e.g., beautify the world, comfortable life, self respect).
Cultural values – values common to one’s culture (e.g., achievement, autonomy, interdependence)
Consumption-specific values – values related to the process of buying (e.g., convenience, friendly service)
Product-specific values – values related to a particular product (e.g., flexibility, speed, natural materials, creative)

38. POSITIONING
Where is product positioned in the minds of target market with respect to other products?
Head-on (Duracell vs. Energizer)
Brand Dominance (Coke: the real thing)
Product Differentiation (Jolt Cola)
Technical Innovation (Gillette Mach 3)
Lifestyle (any beer, soft drink aimed at you)

39. Types of Involvement Rational and emotional involvement
Rational involvement would be devoid of any affect e.g. Choice of steam iron , the consumer would try to optimise a cost-benefit ration with no emotion or interest toward product category - pleasure is absent
Emotional involvement might include hedonic pleasure eg. Choice of restaurant (Hirschman and Holbrook, 1982) 7