1. Developing Lists and Discovering Markets
Chapter 3
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Please Note:
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Opening Vignette
NextMark
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4. Lists Viewed as Market Segments
Lists identify prospects & current customers who are likely to respond to an offer
Different types of lists: mailing, telephone, , magazine, newspaper
Lists are a perishable commodity
House lists: an organization’s own customers.
Response lists: customer lists of other direct marketers who have responded to an offer.
Compiled lists: a list generated by a third party that does not have a response history, usually the least effective type of list.
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THREE TYPES OF LISTS
HOUSE LISTS
RESPONSE LISTS
COMPILED LISTS
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The List Industry
List users
List owners
List managers
List compilers
List brokers
Service bureaus
List user: direct marketer who uses a list.
List owner: organization that owns list (magazine)
List manager: person in list owner’s organization responsible for keeping information in list accurate.
List compiler:The business of creating lists from printed records. The individual or company making such lists is known as a compiler.
List broker: brings list owner and list user together.
Service bureaus: can put the entire direct marketing program together for you (get list, create mailer, etc.)
Required reading:
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List Broker
THE LIST INDUSTRY
List Owner
List Manager
List Compiler
List Users
Service Bureau
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Evaluation of Lists
Measurement of Results
Key Codes on promotional pieces;
Different toll-free numbers;
Hotline names identified & tracked
Response differences attributable to timing
Measurement of results: each direct marketing item is given a unique key code. This enables direct marketer to know which item generated a response.
Differences by month: you can get differing results from an offer due to timing. There are seasonal periods which need to be considered (holidays, season of the year like fall summer). Also, for non-seasonal products, you can get response cycles of differing performance.
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9. The Nature of Market Segmentation
Market segmentation is a marketing plan devised to attract and meet the needs of a specific sub-market.
Explain what segmentation is.
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10. Product Differentiation
Product Differentiation is a strategy which attempts to make a clear distinction between products serving the same market segment.
Is an alternative to price competition
Can distinguish a product from that of competitors
Products & services should be targeted to select market segments.
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Product Positioning
Product Positioning is a marketing strategy that enables marketers to understand how each consumer perceives a company’s product or service based on important attributes
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12. Ways to Position Products:
Product quality
Product size
Product color
Distribution method
Time of day
Price
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13. Segmenting Business Markets
A common means of industrial market segmentation is through the Standard Industrial Classification (SIC) coding system.
The SIC codes serve as a basis for statistical data, used by government, trade associations, and business enterprises.
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NAICS
The North American Industry Classification System (NAICS) has replaced the SIC system.
The NAICS has several improvements over the SIC system.
See Figure 3-5 for a comparison of SIC Codes and NAICS Codes.
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15. The Bases For Market Segmentation
Marketers use five distinct indicators for segmenting markets. These indicators are also known as “bases” for segmenting markets.
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16. The Bases For Market Segmentation
Geographic
Demographic
Social
Psychological
Behavioral
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17. Geographic Segmentation
Neighborhood subdivisions, census divisions, Federal Reserve districts, states, countries, trading areas, cities, towns, census tracts, neighborhoods, and even city blocks.
There are also numerical codes: ZIP codes, telephone area codes, computer “match” codes, territory and route numbers.
Global Positioning System
Geographic Information Systems
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18. Demographic Segmentation
Statistics that describe the consumer population must be
Identifiable
Measurable
Examples: age, gender, income, marital status, occupation, education level, etc.
Age, gender, education level, occupation, type of housing, home ownership status.
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19. Social Factor Segmentation
Social factors demonstrate the influence others have on our behaviors
Beer & Bowling
Golf & Martinis
Culture, sub-culture, social class rank, peer group.
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20. Psychographic Segmentation
Lifestyles
Habits
Attitudes
Beliefs
Value systems
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21. Behavioral Segmentation
Specific types of products and services consumers have purchased
Time the transaction took place
Method or location of their purchases
Method of payment they choose
“Cookies” placed on their computers
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22. Using Multiple Segmentation Bases – Claritas PRIZM Example
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23. Zip Code Areas as Market Segments
“Birds of a feather flock together!”
There are 3 criteria used to establish the Zip Code—hub city; post offices; 2-3 hours normal drive time.
ZIP codes are useful in market segmentation because similar people tend to live near one another.
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Zip Code Areas
Figure 3-12 shows Zip Code digit designations for a five-digit Zip Code.
Nine-digit Zip Codes are very popular.
Wide availability of statistical data for Zip Code areas.
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Case Study
Lillian Vernon
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