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INTERNET SEGMENTS

INTERNET SEGMENTS. Segmentation Internet segments The “Digital Divide” Online activities Consequences of Internet use. Definition. Segmentation : “Aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action.”.

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INTERNET SEGMENTS

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  1. INTERNET SEGMENTS • Segmentation • Internet segments • The “Digital Divide” • Online activities • Consequences of Internet use

  2. Definition Segmentation: “Aggregating prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action.” Although not all these consumers are completely alike, they share relatively similar needs and wants Marketing action: involves efforts, resources, and decisions--product, distribution, promotion, and price

  3. Approaches to Marketing • Undifferentiated Strategy (no intended difference from competitors; no specific consumer group sought out) • Generic, local Internet access • Generic information web page • Concentrated Strategy (differentiation; one consumer segment sought) • E.g., AOL: Easy to use; protection • Differentiated Strategy (same firm makes different versions for different segments) • E.g., Yahoo! offers different types of e-mail access and information access to different customers Southwest Airlines Auto makers

  4. Example • Internet access • Casual, price sensitive user: Cost is most important; speed less so  will probably choose generic dial-up • Casual user, ease of use: Ease of use is more important; will pay for ease  may choose AOL dial-up • Heavy user: May choose broadband • Moderate user: Will choose broadband only if the price is low enough • Traveler: Must have access both at home and while on the road (dial-up or wireless)

  5. Bases for Segmentation • Buyer/consumer characteristics • Demographics • User type • Lifestyle • Behavior • Situation • Benefit desired

  6. Positioning Strategies • “Head-on” competition • Net Zero: Offers access comparable to AOL but at a lower cost • Differentiation • AOL: Ease of use, differentiation • Google: Large free e-mail account but must accept advertising

  7. Segments must • Be relatively similar within and differ between • Respond similarly to different “treatments” (e.g., product offerings, prices, options) • Be practically serviceable • Service must be feasible • Segment must be large enough to be profitable

  8. Targeting: Selecting Segment(s) and Specializing • “You can’t be all things to all people” ---> choose one or more groups • Focus narrows scope of competition, but demands are greater • Repositioning: Changing established position may be difficult -- e.g., • Sears • McDonald Good sales; poor everyday values Lunch; not dinner Good for children

  9. Enterprise Segments • Businesses • Large • Small • Non-business • Public sector • Government • Educational • Non-profit organizations

  10. The “Digital Divide” • Is the Internet an “equalizer” or another obstacle for the disadvantaged? • U.S. • Europe • Developing countries • Cultural issues in Internet use

  11. E-mail Instant messaging Information search Work-related Educational Entertainment News File sharing Photos Entertainment Software/data Online shopping/purchasing Online banking Travel reservations Online auctions Downloading Hobby information Medical information research eGovernment Internet telephony High growth rate activities Consumer Internet Behavior See Siegel, pp. 64-65

  12. Possible consequences • Social isolation • Internet addiction • Making new contacts • Different types of communication • Activism

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