a. Consumer Segmentation:i. Overall Purpose: to achieve the greatest amount of sales with the least amount of expenseb. Reasons for Consumer Segmentation:i. Wasteful and inefficient to market to everyone with the same product1. Advertise to different segments (Ex: cell phones)ii. The company can’t develop separate products for each consumer1. Can’t satisfy everyone2. Custom made products only if it’s profitable (limited variety)c. Factors Leading to Segmentation:i. Introduction of the Marketing Concept:1. Diversity of consumer needs2. People desire different types on products, and when you satisfy their desires the company will flourishii. Higher Standard of Living:1. Higher order needs (once survival needs are met)a. Material things2. Needs to belong, convenience, self-esteem, uniform complianceiii. Increased Competition:1. Marketplace creates demand for new products2. One winner = politics (only)3. If product doesn’t satisfy general need, it goes away4. As long as you’re profitable and a small segment of the population support your product, you stay and are successfuld. Two Major Aspects of Segmentation Strategy:i. Consumer Classification:1. Classifying consumers into potentially profitable groups2. Demographics:a. Statistical study of population sizeb. Age, gender, race, income, education level, etc.3. Geo-graphics:a. Regional differences in consumption patterns and brand preferences4. Psychographics:a. Who you areb. Lifestyle, attitudes, interests, opinions5. Dynamic Variables:a. Changeb. Specific to an individual’s relationship with a productc. Useful for message development and positioning strategiesi. Heavy vs. Light Users1. 80/20 rule80% of sales come from 20% of customers1. Advertise most to heavy users because they bring the most profitii. Early vs. Late Adopters1. Different people try a product for the first time at different points in timea. Youngerb. Higher Educatedc. Higher Incomed. Risk Takers2. Late adopters wait for sales3. Advertisers rely on Early adoptersiii. End Use1. Different consumers purchase the same product for different end uses2. Ex: computer (School, work, etc.)3. Different ad approaches to appeal to different usesiv. Brand Loyal vs. Brand Switching:1. Brand Loyal – the use of one brand of product to the exclusion of all othersa. Most sought after2. Brand Switching – Regular or periodic shifting of brand purchase behavior3. Loyalty in one product doesn’t mean loyalty in allv. Benefit Segmentation:1. Different consumers seek different primary benefits from the same product2. Benefit: an effect of the attribute3. Product Attribute: something the product possesses4. Advertisers focus on the benefitsii. Media and Message Strategies:1. Developing Strategies that will appeal to those groups2. Message:a. The idea to be communicated3. Media:a. The delivery system for the messageb. Segmentation Strategies (major difference = degree of segmentation)i. Undifferentiated (no segmentation):1. One product2. All consumers3. Broad media and message strategyii. Partially Differentiated:1. Several products (one company)a. Each one designed for a different segment of marketplace2. Distinct consumer market segments3. Specific media and messagesiii. Wholly Differentiated:1. Entire user population2. Multiple productsa. Wide array of products to satisfy all segments of the market3. Specific media and messagesiv. Concentrated:1. One primary producta. Targets one specific consumer segmentb. Ex: Gibson guitars2. One consumer segment (very specific)3. Specific media and messagesv. Specific Strategies:1. Rifle Messagea. Specific statements aimed at a target2. Rifle Mediaa. Deliver message to specific audiencesb. Local cable TV, direct mail, special interest magazinesvi. Broad Strategies:1. Shotgun messagea. Broad statementsb. No defined target; generalc. Aim to reach a large number of peopleShotgun MediaDeliver message to broad audiencesTv, general interest magazines, out of home (billboards, etc.)02/10/2013Topic: The Advertising World 1. The marketing concept and its implications for the marketing mix in general, and for the promotions element in particular.a. Marketing Concept:i. A business philosophy where the organization determines the needs of the target market and satisfies those needs at a profitii. Not enough just to satisfy the market, need a profit toob. Marketing Mix:i. Product:1. The bundle of attributes the consumer receives in a transaction2. “What you get”; doesn’t have to be a physical productii. Price:1. What the consumer must give up in order to receive the product2. Methods of payment iii. Place:1. All issues related to the system of distribution2. Initial manufacture final saleiv. Promotion:1. All methods used to inform and persuade the target market about products that are available at some price and in some placec. Decisions about product, price, and place come before promotiond. Need a balance between product development and promotione. Promotions Mix:i. A model of communication alternatives1. Different ways that companies promote products to marketsii. Media vs. Personal (face-to-face) communicationiii. Paid vs. Free communication1. Paid provides controla. Company has control over message and communication butisn’t as credible or believable2. Free provides credibilitya. No company control, but more believableiv. Companies generally use multiple promotional techniques to overcome tradeoff between paid and free communicationv. Different companies use differing levels of each part of mix:Paid FreeMedia Advertising PublicityPersonal Sales Social Media2. The components of the promotions mix, and the characteristics that distinguish these components from each other.a. Advertising:i. Paid mass Mediaii. Any PAID, NONPERSONAL communication from an identified sponsor that INFORMS, PERSUADES, and/or REMINDS. iii. Advantages:1. Control of:a. Messageb. Delivery of the messagec. Timing of delivery of the message2. Low cost to reach each persona. Cost effectiveb. Most effective iv. Disadvantages:1. High absolute cost2. Low credibility3. In many instances, absence of rapid feedbacka. Doesn’t give immediate feedback, or immediate sales; occurs over timeb. Publicity (Public Relations):i. Free Mediaii. Develops understanding and good williii. Publicity:1. Media time and space that the organization does not pay for2. More credibility but not as much controliv. Hard to overcome negative publicity (BP oil spill)c. Salesi. Paid and Personal
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