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-marketingA strategy that presumes there is one undifferentiated market and that one product will appeal to all consumers in that market.AdvantagesLower costOne advertising campaign is neededOne marketing strategy is developedUsually only one standardized product is developedDisadvantageIt only works if all consumers have the same needs, wants, desires, and the same background, education and experienceMarket matching strategyToday, mass marketing has largely been replaced by a three-step market matching strategyPositioningSegmentationMarket Matching StrategyMarket MatchingTargetingMarket Matching StrategySegmentationAct of dissecting the marketplace into submarkets that require different marketing mixesTargetingProcess of reviewing market segments and deciding which one(s) to pursuePositioningEstablishing a differentiating image for a product or service in relation to its competitionMarket segmentationThe 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 PsychographicBehavioralGeodemographicMarketers may use a single variableMarketers may use two or more variablesGeographic SegmentationDivision of the market based on the location of the target marketPeople living in the same area have similar needs and wants that differ from those living in other areasClimatePopulation densityTasteMicromarketingDemographic SegmentationPartitioning of the market based on factors such asagegender marital statusincomeoccupationeducation ethnicityAgeProduct needs and interests often vary with consumers’ ageAge EffectsOccurrences due to chronological ageCohort EffectsBased on the idea that people hold onto the interests they learned to appreciate growing upGenderGender is frequently a distinguishing variableChanges in the family and growth of the dual-income household have blurred some of the linesMarital StatusMarketers have identified specific marital status groups, such as:1. Singles2. Divorced individuals3. Single parents4. Dual-income married couplesThey then market products specifically designed for one or more groupsIncome, Education & OccupationThese 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 serviceIncome is often combined with other variables to narrow target markets:With age to identify the important affluent elderlyWith age and occupation to produce the yuppie segmentRace and EthnicityThe size and purchasing power of minorities make them an attractive target marketThe size of the market is growing dramatically relative to the “majority” populationTargeting certain products (e.g., alcohol, tobacco) to such groups raises ethical issuesTobacco and the African American CommunityWhy is there a concern about targeting African Americans?During the ’90s, youth smoking rates increased sharply12.6% in 199122.7% in 199780% increaseAfter Native Americans, African Americans have the highest rate of smokers of any ethnic group in the USAfrican American men have the highest rate of death from lung cancer of any ethnic group in the US81% of African American men who smoke and contract lung cancer die51% of white men who smoke and contract lung cancer dieTobacco companies have clearly targeted African AmericansBrown & Williamson’s Kool brand used a cartoon character, the penguin Willie, that was popular with black teensHas sponsored an annual jazz festival that attracts large black audiencesIn 1998 cigarette advertisements represented 60% of ad space in black newspapersFollowing 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 movementMarketed in 20 states before pressure from the community forced discontinuance of the brandGeodemographic SegmentationA 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 habitsMarket research firms specialize in producing computer-generated geodemographic market “clusters” of consumersThey have clustered the nation’s >250,000 neighborhoods into lifestyle groupings based on postal zip codesMarketers 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 SegmentationPartitioning of the market based on lifestyle and personality characteristicsMarketers use it to further refine a target marketIts appeal lies in the vivid and practical profiles of consumer segments that it can produceAccomplished by using AIO inventoriesAIO InventoriesAIO research seeks consumers’ responses to a large number of statements that measureActivities Interests
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