1. Chapter 3 Market Segmentation
Consumer Behavior, Ninth Edition
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Chapter Outline
What Is Market Segmentation?
Bases for Segmentation
Criteria for Effective Targeting of Segments
Implementing Segmentation Strategies
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Market Segmentation
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.
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4. Three Phases of Marketing Strategy
Product/Brand Positioning
Phase 2
Target Market and Marketing Mix Selection
Phase 1
Market Segmentation
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Segmentation Studies
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
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6. Ryka produces sneakers that meet the special needs of women’s feet.
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Discussion Question
Considering the largest bank in your college’s city or town:
How might consumers’ needs differ?
What types of products might meet their needs?
What advertising media makes sense for the different segments of consumers?
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8. Bases for Segmentation
Geographic
Demographic
Psychological
Psychographic
Sociocultural
Use-Related
Usage-Situation
Benefit Sought
Hybrid
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9. Table 3.1 Market Segmentation
SEGMENTATION BASE
SELECTED SEGMENTATION VARIABLES
Geographic Segmentation
Region
Southwest, Mountain States, Alaska, Hawaii
City Size
Major metropolitan areas, small cities, towns
Density of area
Urban, suburban, exurban, rural
Climate
Temperate, hot, humid, rainy
Demographic Segmentation
Age
Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Sex
Male, female
Marital status
Single, married, divorced, living together, widowed
Income
Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,999, $100,000 and over
Education
Some high school, high school graduate, some college, college graduate, postgraduate
Occupation
Professional, blue-collar, white-collar, agricultural, military
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Table 3.1, continued
SEGMENTATION BASE
SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Needs-motivation
Shelter, safety, security, affection, sense of self-worth
Personality
Extroverts, novelty seeker, aggressives, innovators
Perception
Low-risk, moderate-risk, high-risk
Learning-involvement
Low-involvement, high-involvement
Attitudes
Positive attitude, negative attitude
Psychographic
(Lifestyle) Segmentation
Economy-minded, couch potatoes, outdoors enthusiasts, status seekers
Sociocultural Segmentation
Cultures
American, Italian, Chinese, Mexican, French, Pakistani
Religion
Catholic, Protestant, Jewish, Moslem, other
Subcultures (Race/ethnic)
African American, Caucasian, Asian, Hispanic
Social class
Lower, middle, upper
Family life cycle
Bachelors, young married, full nesters, empty nesters
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Table 3.1, continued
SEGMENTATION BASE
SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Brand loyalty
Awareness status
Usage rate
Heavy users, medium users, light users, non users
Unaware, aware, interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time
Leisure, work, rush, morning, night
Personal, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Person
Self, family members, friends, boss, peers
Benefit Segmentation
Convenience, social acceptance, long lasting, economy, value-for-the-money
PRIZM NE Geodemographics
“Movers & Shakers,” “New Empty Nests,” “Boomtown Singles,” “Bedrock America”
Demographic/
Psychographics
Combination of demographic and psychographic profiles of consumer segments profiles
SRI VALSTM
Innovators, Thinkers, Believer, Achievers, Strivers, Experiencer, Makers, Survivors
Hybrid Segmentation
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12. Geographic Segmentation
The division of a total potential market into smaller subgroups on the basis of geographic variables (e.g., region, state, or city)
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13. Demographic Segmentation
Age
Sex
Marital Status
Income, Education, and Occupation
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14. Web sites for Singles Looking for a Match
weblink
weblink
Match.com targets all singles
The Right Stuff targets only Ivy League graduates
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15. Psychological Segmentation
Motivations
Personality
Perceptions
Learning
Attitudes
Harley-Davidson Video
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16. Two High-End Watches for Different Psychological Segments
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17. Psychographic Segmentation
Also known as Lifestyle Analysis
Psychographic variables include attitudes, interests, and opinions (AIOs)
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18. Table 3.6 Excerpts from AIO Inventory
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.
Agree
Completely
Disagree
Completely
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
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19. Opinions and Attitudes
ADBUSTERS Web site is targeted to consumers with a certain attitude toward advertisers
weblink
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20. Sociocultural Segmentation
Family Life Cycle
Social Class
Culture, Subculture, and Cross-Culture
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21. Family Life Cycle Advertising
Video cameras are often purchased by young couples with children.
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22. Target reaches out to the Latino market.
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Discussion Questions
What types of marketers might segment according to social class?
What ethical issues might marketers have when marketing to different social classes?
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24. Use-Related Segmentation
Rate of Usage
Heavy vs. Light
Awareness Status
Aware vs. Unaware
Brand Loyalty
Brand Loyal vs. Brand Switchers
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25. Segmenting Customers by Usage Table 3-8
Current Share
High Low
High
Low
HiHighs
(stroke)
LowHighs
(chase)
Consumption
HiLows
(tickle)
LoLows
(starve)
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26. Usage-Situation Segmentation
Segmenting on the basis of special occasions or situations
Example Statements:
Whenever our daughter Jamie gets a raise, we always take her out to dinner.
When I’m away on business, I try to stay at a suites hotel.
I always buy my wife flowers on Valentine’s Day.
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27. Segmenting on the basis of the most important and meaningful benefit
Benefit Segmentation
Segmenting on the basis of the most important and meaningful benefit
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28. Band-aid offers “flex” as a
benefit to consumers.
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29. Hybrid Segmentation Approaches
Psychographic-Demographic Profiles
Geodemographic Segmentation
SRI Consulting’s VALS
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30. Selected Demographic Profile of USA Today Excerpt from Table 3-10
USA TODAY.COM
USA TODAY NETWORK
Men
66%
70%
Women
34%
30%
Age 18-49
62%
73%
64%
Age 25-54
65%
78%
67%
Age 55+
27%
18%
25%
Average Age 45 43
Attended college or beyond
77%
83%
College graduate or beyond
55%
56%
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31. Selected Lifestyle Profile of USA Today Excerpt from Table 3-11
% Comp
Index
Tech Savvy Readers
Use Internet more than once a day
32%
174
Internet access at home
79%
128
Online purchase for business or personal use in past 30 days
40%
182
Household owns a PC
84%
119
Owns digital camera
22%
130
Leisure Activities
Attended movies in last 6 months
73%
120
Bought music CD/tapes in last 12 months
46%
126
Book reading
45%
Entertain friends or relatives at home in last 12 months
48%
123
Household subscribes to cable
69%
112
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32. VALS Framework Figure 3-7
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Discussion Question
How would you classify yourself according to VALS? Your parents?
Do you think this represents you as a consumer?
If so, for what products does this fit you as a consumer?
Copy down the URL below to take the VALS survey tonight. See if you were right in your classification…
weblink
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34. Criteria for Effective Targeting of Market Segments
Identification
Sufficiency
Stability
Accessibility
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35. Implementing Segmentation Strategies
Concentrated Marketing
One segment
Differentiated
Several segments with individual marketing mixes
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