MKT 3010 1st Edition Lecture 7Outline of Last LectureNo last lecture: new material for test 2 starts todayOutline of Current Lecture Market segmentation/STP analysisStep 1: Establish Overall Strategy or ObjectivesStep 2: Segmentation- 6 MethodsStep 3: Evaluate Segment attractivenessCurrent LectureFeb. 5, 2015Chapter 9: Segmentation, Targeting, and PositioningMarket Segmentation/STP Analysis- Step 1: Establish Overall Strategy or Objectiveso Segmentation strategy- looking for a similar characteristic between people (because people in similar groups will have similar wants, needs, etc.)o Consistency- Mission, Objectives, Current situation (How you segment based on these things)- Step 2: Segmentationo Helps the firm understand customer: Profile, similarities, dissimilaritieso Links needs to action (how will these similar needs lead to similar actions)1) Identify market needs2) Take steps to segment and target markets3) Execute marketing mix (4 P’s)o Methods Demographic segmentation- based on age, generation, gender ***Most common form of segmentation-easy to do Geographic segmentation- based on region, area, neighborhoodso Proximity marketing- utilizing wireless to gain access (advertising, promoting special deals) to customers in proximity to the storeo Geocoding- used to find out where customers come fromThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. Psychographic Segmentation- understanding more about personal characteristics and psychological reasoning—based on three things:1. Self values- life goals: drive consumer needs2. Self image/concept- how you view yourself in context to your life goals3. Lifestyle- how do you live your life on a daily basis to achieve your goals VALS Framework- survey used to help determine psychographics***Better at predicting behavior, but more expensive Benefit segmentation- selling products by promoting a special benefit with the product Behavioral segmentation- based on how often you use a product, the way that you use a specific product, and your loyalty to a specific company’s product Geodemographic segmentation-a range of methods used for classifying and characterizing neighborhoods or localities based on the principal that residents living near each other are likely to have similar demographic, socio-economic and lifestyle characteristics- Step 3: Evaluate Segment Attractiveness: is this segment worth pursuing?o Identifiable- must be unique from other segments, determines marketing mixo Substantial- size of segmento Reachable- customers must know that product exists, what it can do for them, and where they can get ito Responsive- do consumers react positively to the product/brando Profitable- future profitability, market growth, competition, customer loyalty, what is cost of replacing lost customersKey terms:Market segmentationSTPSegmentation StrategyConsistencyDemographic segmentationGeographic segmentationPsychographic SegmentationVALS FrameworkBenefit segmentationBehavioral segmentationGeodemographic