1. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Chapter 6 Market Segmentation and the Marketing Mix: Determinants of Advertising Strategy Describes how marketers use behavioral characteristics to cluster prospective customers into market segments

3. Objectives Identify the various methods advertisers use to segment consumer and business markets Explain the importance of aggregation to marketing and advertising Discuss how target marketing affects the firm’s advertising strategy Describe the elements of the marketing mix and the role of advertising in the mix Explain the purpose and importance of branding

4. The Market Segmentation Process Market Segmentation 1. Identify people with shared needs and characteristics

5. The Market Segmentation Process Market Segmentation 1. Identify people with shared needs and characteristics 2. Aggregate these groups into market segments according to their mutual interest in the product’s utility

6. Segmenting the Consumer Market Behavioristic Segmentation Sole users Semi-sole users Discount users Aware nontriers Trial/rejectors Repertoire users User Status Variables

7. Segmenting the Consumer Market Behavioristic Segmentation User Status Variables Volume segmentation User-rate Variables Purchase-occasion Variables Benefits-sought Variables Benefit segmentation

8. Segmenting the Consumer Market Behavioristic Segmentation Geographic Segmentation Demographic Segmentation Geodemographic segmentation Psychographic Segmentation VALS2

9. Segmenting Business Markets Business Markets Manufacturers Government Wholesalers Retailers Banks

10. Segmenting Business Markets Understanding organizational buying behavior Business purchasing procedures Industrial classification system Market concentration

11. Segmenting Business Markets Aggregating market segments Selecting groups interested in product utility Combining groups to build target market segments

12. Exchanges perception, satisfaction The Target Marketing Process Target Market Selection The Marketing Mix: Matching products to markets Product concept Marketing mix Product Price Distribution Communication

13. Exchanges perception, satisfaction Advertising and the Product Element Product life cycles Product classifications

14. Exchanges perception, satisfaction Advertising and the Product Element Product life cycles Product positioning Product differentiation PerceptibleHiddenInduced Product classifications

15. Exchanges perception, satisfaction Advertising and the Product Element Product life cycles Product positioning Product differentiation Product branding Individual brand Family brand National brands Private labels Product classifications

16. Exchanges perception, satisfaction Advertising and the Product Element Product life cycles Product positioning Product differentiation Product branding Product classifications The role of branding Brand equity

17. Exchanges perception, satisfaction Advertising and the Product Element Product life cycles Product positioning Product classifications Identification Product packaging Containment, protection, convenience Consumer Appeal Economy

18. Exchanges perception, satisfaction Advertising and the Price Element Key factors influencing price Market demand Production and distribution costs Competition Corporate objectives and strategies Variable Influences

19. Exchanges perception, satisfaction Advertising and the Distribution (Place) Element Direct distribution Network marketing Indirect distribution Intensive distribution Selective distribution Exclusive distribution Vertical marketing systems

20. Exchanges perception, satisfaction Advertising and the Communication (Promotion) Element Personal selling Advertising Direct marketing Public relations Collateral materials Sales promotion