The Market Segmentation Process

1. The Market Segmentation Process WTUC http://www.4cconsulting.com/uploadedImages/Management_consultancy/Intelligence_and_strategy/Segmentation.jpg

2. Importance of Market Segmentation in Advertising • To find profitable market segments • Scan marketplace and see what various consumer segments need and want and how they might be better satisfied http://attractionmarketing.com/images/ad-Verizon.jpg

3. 2-Step Strategy • Identifying groups of people (or organizations) with certain shared needs and characteristics within the broad markets for consumer of business products • Aggregating (combining) these groups into larger market segments according to their mutual interest ion the product’s utility.

4. Applying the Strategy • Pool them together into one aggregate target market • These people share the same interests in relation to your product’s utility Large market group

5. General Population of consumers Target market- which lays the foundation for developing the proper mix of marketing activities-including advertising http://www.intomartgfk.nl/images/bg_logo.gif

6. Markets consists of many segments • A company differentiate products and marketing strategy for every segment • Or simply concentrate on one segment

7. Types of Targets • Marketing activities are aimed at a particular segment of the population • Advertising is aimed at a particular group Target market Target audience

8. Types of Markets

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11. Finding the Right Niche http://www.valicon.net/uploads/whowhatwhy_eng_popravki.gif

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13. Behavioristic Segmentation • User status • Usage rate • Purchase occasion • Benefits sought

14. User-Status Variables • Sole users- most brand loyal, require least amount of advertising and promotion • Semisole users- typically use Brand A but have an alternate selection if it is not available or if alternate is promoted with a discount • Discount users- semisole users of competing Brand B. They don’t buy Brand A at full price • Aware Nontriers- use competitive products in the category but haven’t taken a liking to Brand A. These people rarely offer potential • Trial/Rejectors- bought Brand A’s advertising but didn’t like the product. Only reformulation of Brand A will bring them back • Reportoire users- perceive two or more brands to have superior attributes and will buy at full price. Primary brand switchers and respond to persuasive advertising based on the fluctuating wants and desires

15. Usage-Rate (Volume) Variables • Light users • Medium users • Heavy users

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19. Purchase-Occasion Variable • Buyers are distinguished when they buy or use a product • Air travelers- may fly for business or vacation • Purchase- affected by frequency of need (regular/occasional), a fad (computer games), seasons (water skis, raincoats) • Marketers who discovers common purchase occasions for a group has a potential target segment and can better determine when to run specials and when to promote certain product categories

22. Benefit-Sought Variable • Benefits • High quality • Low price • Status • Sex appeal • Good taste • Health conscious • Symbolism- what the brand means to them or to their friends or some reference group • Switching occurs in response to different needs

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25. What’s the User Benefit here?

26. High-Quality Benefit

27. What’s the User Benefit here?

28. Low Price benefit

29. What’s the User Benefit here?

30. Status Benefit

31. What’s the User Benefit here?

32. Status Benefit

33. What’s the User Benefit here?

34. Sex Appeal Benefit

35. What’s the User Benefit here?

36. Good Taste Benefit

37. What’s the User Benefit here?

38. Health Conscious Benefit

39. What’s the User Benefit here?

40. Brand Symbol Benefit

41. Geographic Segmentation • Region • Country size • City size • Specific locations • Types of stores

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43. Demographic Segmentation • Sex • Age • Ethnicity • Education • Occupation • Income • And other quantifiable factors

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46. Geodemographics Segmentation • Demographics combined with geographic segmentation • People’s lives are influenced by their environment and ethnicity

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48. Psychographic Segmentation • Emotional appeal • Cultural values • Attitudes • Personality • Lifestyle • View people as individuals with feelings and inclinations

49. Tangible markers of success or accomplish-ments Basic principles or values Desire for experiences or risk http://www.media-studies.ca/articles/images/VALS.jpg

50. Example: Company that markets high-end motorcycles • A demographic profile might suggest that prospects are males between the ages of 30 and 50 • A psychographic profile could extend the analysis by noting that the best prospects are experiences: Men motivated by self-expressive needs who also have sufficient resources to buy an expensive bike