1. Market Segmentation and Product Positioning1

2. Exercise
If Starbucks Via was a person, what would that person be like? Describe his/her characteristics and interests.
What does this tell you?
Are your descriptions consistent with the way Starbucks Via is being promoted (and positioned)? MacBeth and Kyle love Via!
Far Out Via Coffee

3. What is Market Segmentation?
Market segmentation is the process of dividing a market into groups of similar consumers and selecting the most appropriate group(s) of individuals for the firm to serve
Why Segment?
Fragmentation: Different groups have different needs/wants
Allows marketers to establish appropriate marketing mix for a given segment 3

4. Five Tasks
In Market
Segmentation:

5. (1) Analyze Consumer-Product Relations
Analyzing C-P Relations involves figuring out how affect, cognition and behavior are relevant to how consumers experience a product
Three Approaches
Brainstorming to figure out what types of consumers are most likely to buy product and how they differ from other groups of customers
Focus groups can be used to identify what customers want, their values, etc.
Secondary research can be used to gain additional information on key market segments 5

6. Five Tasks
In Market
Segmentation:

7. (2) Investigate Segmentation Bases
Four common segmentation bases
Benefit
Psychographic
Person/situation
Geodemographic 7

8. Benefit Segmentation
Divide the market up on the basis of the benefits they seek from a product.
An example: toothpaste 8

9. Psychographic Segmentation
Uses psychological, sociological, anthropological factors to develop segments
Personality (sensation seeking)
Motives (status)
Lifestyles (HOGs)
VALS2 (Values + Lifestyles) System
Based on psychological characteristics that relate to consumer behavior
Can Identify Prevalence of 8 Types by Zip Code 9

10. Values and Lifestyles (VALS) System
Innovators
High Resources
High Innovation
Ideals
Achivem.
Self Expr.
Thinkers
Achievers
Experiencers
Believers
Strivers
Makers
Survivors
VALS Web Site
Low Resources
Low Innovation 10

11. VALS Types – Part 1

12. VALS Types – Part 2

13. Person/Situation Segmentation
Divide market up on the basis of the benefits certain types of individuals (person) desire in certain situations (situation)
Different strokes, for different folks…in different situations
An Example: Old Spice 13

14. Person/Situation Segmentation (Steps)
Figure out if there are different usage situations that influence which attributes are important
Assess perceptions of different segments about product in different situations
Create “user” x “usage” matrix
(cont. on next slide)…
Kids
Adults
Home
Sports 14

15. Person/Situation Segmentation (Steps)
Rank cells in terms of market share
Identify important benefits sought in each cell of matrix
Figure out where your competitors are located in the matrix
Position your product in matrix and figure out how well you are meeting the need relative to your competitor
Identify opportunities based on segment size, needs, and competitive advantage of your offering 15

16. Demographic Segmentation
Age, sex,, income, education, family size, occupation, marital status
Sociocultural Segmentation
Culture, religion, race, social class
Generational Segmentation
Kids, tweens, teens, Gen X, Gen Y, Gen Z, Boomers

17. Geodemographic Segmentation
Geodemography
Combination of geographic and demographic information
Creates classifications of actual, addressable, mappable neighborhoods where consumers live and shop
PRIZM NE system by Claritas
Assumes consumers in certain neighborhoods are similar in many respects and that the best prospects are those who actually use a product or other consumes like them
66 clusters: (one example) 

18. Sample Claritas (PRIZM) Cluster
More
Clusters
YOUNG INFLUENTIALS (22)
Once known as the home of the nation's yuppies, Young Influentials reflects the fading glow of acquisitive yuppiedom. Today, the segment is a common address for younger, middle-class singles and couples who are more preoccupied with balancing work and leisure pursuits. Having recently left college dorms, they now live in apartment complexes surrounded by ball fields, health clubs, and casual-dining restaurants. 18

19. Five Tasks
In Market
Segmentation:

20. (3) Positioning Four Steps in Positioning
Evaluate (direct and indirect) competition
Create product/service with competitive advantage
Attribute (Komperdell Gloves – Seamless Technology)
Use or application (A Snapple A Day)
Product user (Zales – three store concepts)
Product class (Position margarine as butter)
Competitor (Burger King vs. McDonalds)
Price/quality (Target – an upscale discounter)
Emotion (Nike - Just Do It!) 20

21. (3) Positioning Four Steps in Positioning
Evaluate (direct and indirect) competition
Create product/service with competitive advantage
Develop marketing mix to appeal to target segment
Measure response and adapt strategy if needed
May need to reposition product/service
Repositioning may involve bringing old brand back to life (retro brand). 21

22. Creating the Brand Personality
A distinctive image that captures a product’s or service’s essence (character, benefits)
Where does my brand stand?
Ask customers what characteristics are important
Measure your brand and competition on those dimensions
Plot and evaluate your brand’s location in a perceptual map 22

23. Describe These Brand Personalities
Volvo Wagon
Lamborghini 23

24. Perceptual Map Classy/Distinctive Porsche BMW Lincoln Mercedes
Position
Conservative
Sporty
Ford
Plymouth
Toyota VW
Positioning
Bases
Practical/Affordable 24

25. Five Tasks
In Market
Segmentation:

26. (4) Select Segmentation Strategy
Four basic segmentation strategy alternatives
Do not to enter the market
Be a mass marketer instead of segmenting
Market to only one segment
Market more than one segment and design a separate marketing strategy for each

27. Criteria for Successful Segmentation
Sustainable
Large enough to justify its own marketing mix
Identifiable and Measurable
If not, can not determine whether it’s sustainable
Accessible
Must be able to reach segment with marketing mix
Responsive
The segment responds differently than another segment
If not, no need to develop unique marketing mix 27

28. Five Tasks
In Market
Segmentation:

29. (5) Design the Marketing Mix
Product
Price
Promotion
Place
Closely linked with the segmentation strategy

30. Wrapping Up An Application to Sports Marketing

31. Some of My Favorite Products

32. What Do All These Products Do For Me? “Means End Chain”
Attributes
Functional
Consequences
Psychological
Consequences
Personal
Values