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UVM CDAE 127 - Segmentation, Targeting and Position

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Chapter 3Mass-marketingSlide 3Slide 4Market matching strategyMarket Matching StrategySlide 7Market segmentationSegmentation VariablesSlide 10Geographic SegmentationDemographic SegmentationAgeAge EffectsCohort EffectsGenderMarital StatusIncome, Education & OccupationRace and EthnicityTobacco and the African American CommunitySlide 21Slide 22Geodemographic SegmentationSlide 24Psychographic SegmentationAIO InventoriesExamples of the use of psychographic segmentation reflected in marketing messagesBehavioral SegmentationSlide 291. Usage Rate2. Benefit Segmentation3. Brand and Store LoyaltySlide 33Choosing Market Segments to TargetMarket Targeting Strategies1. Undifferentiated StrategyAdvantages and Disadvantages2. Multisegment/Differentiated StrategyAdvantages and disadvantages3. Concentration/Niche Marketing StrategySlide 41PositioningSlide 43Perceptual MappingA visual profile of how consumers perceive a number of pain relievers on the two dimensions of effectiveness vs. gentleness.RepositioningSlide 47Slide 48Slide 49Slide 50Slide 51Slide 52Slide 53Segmentation, Segmentation, Targeting, Targeting, and Positioningand PositioningChapter 3Segmentation, Targeting, and PositioningMass-marketingA strategy that presumes there is one undifferentiated market and that one product will appeal to all consumers in that market.AdvantagesLower costOne advertising campaign is neededOne marketing strategy is developedUsually only one standardized product is developedDisadvantageIt only works if all consumers have the same needs, wants, desires, and the same background, education and experienceMarket matching strategyToday, mass marketing has largely been replaced by a three-step market matching strategyPositioningSegmentationMarket Matching StrategyMarket MatchingTargetingMarket Matching StrategySegmentationAct of dissecting the marketplace into submarkets that require different marketing mixesTargetingProcess of reviewing market segments and deciding which one(s) to pursuePositioningEstablishing a differentiating image for a product or service in relation to its competitionMarket segmentationThe process of dividing a market into distinct subsets (segments) of consumers with common needs or characteristics and selecting one or more to target with a distinct marketing mixSegmentation VariablesSegmentation VariablesGeographicDemographic PsychographicBehavioralGeodemographicMarketers may use a single variableMarketers may use two or more variablesGeographic SegmentationDivision of the market based on the location of the target marketPeople living in the same area have similar needs and wants that differ from those living in other areasClimatePopulation densityTasteMicromarketingDemographic SegmentationPartitioning of the market based on factors such asagegender marital statusincomeoccupationeducation ethnicityAgeProduct needs and interests often vary with consumers’ ageAge EffectsOccurrences due to chronological ageCohort EffectsBased on the idea that people hold onto the interests they learned to appreciate growing upGenderGender is frequently a distinguishing variableChanges in the family and growth of the dual-income household have blurred some of the linesMarital StatusMarketers have identified specific marital status groups, such as:1. Singles2. Divorced individuals3. Single parents4. Dual-income married couplesThey then market products specifically designed for one or more groupsIncome, Education & OccupationThese three variables are often related and therefore often used together as a measure of one’s social class.Income is commonly used because marketers feel it is a strong indicator of ability to pay for a particular product or serviceIncome is often combined with other variables to narrow target markets:With age to identify the important affluent elderlyWith age and occupation to produce the yuppie segmentRace and EthnicityThe size and purchasing power of minorities make them an attractive target marketThe size of the market is growing dramatically relative to the “majority” populationTargeting certain products (e.g., alcohol, tobacco) to such groups raises ethical issuesTobacco and the African American CommunityWhy is there a concern about targeting African Americans?During the ’90s, youth smoking rates increased sharply12.6% in 199122.7% in 199780% increaseAfter Native Americans, African Americans have the highest rate of smokers of any ethnic group in the USAfrican American men have the highest rate of death from lung cancer of any ethnic group in the US81% of African American men who smoke and contract lung cancer die51% of white men who smoke and contract lung cancer dieTobacco companies have clearly targeted African AmericansBrown & Williamson’s Kool brand used a cartoon character, the penguin Willie, that was popular with black teensHas sponsored an annual jazz festival that attracts large black audiencesIn 1998 cigarette advertisements represented 60% of ad space in black newspapersFollowing the success of the movie “Malcolm X”, Star Tobacco Co. introduced a new brand called “X,” packaged in the black, red and green colors of the black nationalist movementMarketed in 20 states before pressure from the community forced discontinuance of the brandGeodemographic SegmentationA hybrid segmentation scheme Based on notion that people who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles and consumption habitsMarket research firms specialize in producing computer-generated geodemographic market “clusters” of consumersThey have clustered the nation’s >250,000 neighborhoods into lifestyle groupings based on postal zip codesMarketers use the cluster data for mail campaigns, to select retail sites and merchandise mixes, to locate banks and restaurants, etc.“You Are Where You Live”.Psychographic SegmentationPartitioning of the market based on lifestyle and personality characteristicsMarketers use it to further refine a target marketIts appeal lies in the vivid and practical profiles of consumer segments that it can produceAccomplished by using AIO inventoriesAIO InventoriesAIO research seeks consumers’ responses to a large number of statements that measureActivities Interests


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