Dr. Darrel Muehling

1. Unit 3 (Part I) – Segmenting Dr. Darrel Muehling

2. Marketing principles applied to promotion Segmenting Target marketing Positioning

3. Defined • Segmenting– discovering unique groups of consumers that exist in the marketplace • Target marketing – deciding which of these segments you wish to target (focus on) • Positioning – developing & executing a creative strategy that creates or reinforces a brand image

4. So, what’s the difference between a “market segment” and a“target market?”

5. Two Approaches to Segmenting • “a priori” – before any data are gathered and examined. Based upon personal/market-based experiences or hunches. Assumes that differences must exist among consumers; segment accordingly. • “empirical” – begins with research of the marketplace. Data analysis reveals segments.

6. What must be established to say that, indeed, you have defined “segments?”

7. Criteria for establishing segments: • Homogeneous within – members in each individual group share relevant traits and needs • Heterogeneous between – traits and needs of one group are different than those of another group • Substantial – large enough to be potentially profitable if targeted • Meaningfully defined – descriptions of the groups are appropriate for the product/service being segmented

8. How are groups (segments) “meaningfully defined?” (Segmentation bases): • Demographic • Geographic • Psychographic • Behavioristic

9. Examples • Demographic age, income, marital status, gender, education, family size, race, occupation, etc. • Geographic country, region, state, city, neighborhood, etc. • Psychographic lifestyles, AIO’s (activities, interests, opinions) • Behavioristic usage rate, brand loyalty, store type, benefits sought

10. The expected outcome of segmentation analysis is to develop a “profile” of consumers for each segment.

11. Profile A detailed description of consumers comprising each segment

12. Segmenting the Market Segmt #1 Segmt #2 Segmt #3 profile profile profile

13. “Profiles” Each segment profile should contain descriptions representing all four of the segmentation bases: (demographic, geographic, psychographic, and behavioristic)

14. So, what’s the purpose of the “profile?” Directs/guides advertisers in their attempt to “reach” consumer segments

15. “Reaching” consumers: • “creatively” pictures, words, illustrations, etc. – an advertising campaign that consumers can identify with (i.e., that speaks to them) • “literally” via media… placing the ad in a medium where targeted consumers can be found

16. Recruitment Ad for the U.S. Army?

19. If you were developing “profiles” for purposes of designing advertising creativestrategies…which segmentation base would provide you with the type of information that would be most helpful? Behavioristic Specifically, “benefits sought” information. Then, enrich the profile by adding details about consumers’ psychographics, demographics, and geographics.