Test 2 NotesMarket SegmentationLevi’s Gay CommercialOld SpiceTed Talks Simon SinekC. Geographic, Economic, and DemographicD. Attitudes, Economic, and LifestyleE) All of the above trends shaped MillennialsE All of the above are trueTest 2 NotesMarket Segmentationo Characteristics of individuals, groups, or organizations used to divide a total market into segments. (Variables)o Based on motivationso The 80/20 principleo A principle holding that 20 percent of all customers generate 80 percent of the demand.o Segmentation helps marketers satisfy customer’s wants and needs while meeting the organization’s objectives.o Characteristics of Segmentation: Segmentation enables the identification of groups of customers with similar needs, and the analysis of the buying behavior of these groups.o Sustainability Segment must be large enough to warrant a special marketing mixo Identifiably Segments must be identifiable and measurableo Accessibility Members of targeted segments must be reachable with the marketing mixo Responsiveness No separate treatment is neededo Externalo Easily measured/observedo Relatively inexpensive/quicko Less correlation for market behavioro Examples: Geography: a product can vary from New York to Florida.- Example: you won’t wear a tank top in New York, but you might wear it in Florida during the summer. Economic: things you can afford because of your level of income- Someone with a higher income might drive a Mercedes, where someone with a lower income might drive a Kia. Cultural: who you are surrounded with helps to determine what kinds of things you buy. It is not commonly used. Demographic (gender) - There are men’s deodorants and women’s deodorant.- Uses the 4 P’s Social class: It used to be important many years ago and has to do with things like education. It is more commonly referred to as lifestyle segmentation. Religious: has to do with the different religions people believe in and different values people have.o Clothes (relative to weather) Depending upon the weather, dictates what type of clothes youare going to wear that day.o Internalo Expensive o Time consuming (special study); we would have to do our own study to find out this information.o Greater correlation between the segmentation characteristics and the market place behavior.oo Examples: Lifestyle (attitude, interest, opinion)- Prizm studies- How a person dresses Perceptions- How a person perceives a product that helps to determine if they would like to purchase it. Motivations - How someone is motivated to buy a specific item Needs Personality Attitude Stages in the buying processo Image (by looking at an ad) you can tell what lifestyle is like. You think to yourself, why would I buy something?o Product Relatedo Characteristics of product What makes the product different from other products?o Usage rate How often you would use something There are different levels of users, light and heavyo Brand loyalty People will buy from this brand simply because of the name. There is a sense that this brand will stay true to its name.o Purchasing habits You buy the same item because it has worked for you in the pasto Benefits sought You see certain benefits in this product over another oneo Occasion Why are you buying this? Is it for a birthday, wedding, etc.o *Use marketing on heavy userso Segmentationo Consumer markets Consumers buy these products to use o Business markets Items bought for saleo Externalo Easily measured, easily observed, relatively inexpensive, quicko Consumer behavioro The buying behavior of a consumer The decision processes and actions of people involved in buying and using productso Consumer behavior The decisions and purchasing activities of people who purchase who purchase products for personal or household use and not for business purposeso High involvement products tend to be those that are visible to others and expensive.o Temporary and dynamic involvement resulting from a particular set of circumstances is situation al involvement. o Involvement level affects person selection of one of three type s of consumer problem solving: Routinized response behavior, Limited problem solving Extended problem solvingo What are consumers thinking?o Often times, consumers do not know why they bought something.o Examples: Psychology Sociology Economics Social psychology Demography Anthropologyo Classical conditioning Bell food Salivate The process in which conditional stimulus leads to unconditional stimulus that leads to response. Downs mentions a sociology study where the dog responds to a bell and gets a treat. Conditioned stimulus unconditioned stimulus response Conditioned stimulus- Ex. Bell- A verbal or graphic description of the product- Ex. Symbol Unconditioned stimulus- Ex. Food- The actual product Response- Ex. Salivate- The interest, knowledge, behavior towards a product. Verbal/graphic description of product actual product awareness, interest, knowledge, attitudes, performance, behavioro Instrumental conditioning An “alternative theory” which talks about voluntary behavior Marketers try to shape a consumers behavior through this Condition response conditioning stimuluso Serial Learning Product and Brand name In class Downs named baseball teams and asked us to write down what you remember. The tendency to remember things that are said first and last.- Results in a U shaped curve- Primacy and regencyo Paired Association We associate things together to help us remember- Hamburger and Fries- This is meant for the consumers to think of one and remember the other.- A slogan with a brando Publix, where shopping is a pleasureo Millennial Marketers have to understand how they are going to accept theproduct There is a generational segmentation (an emotional tie) from one generation to another Focus on children and family settings Our civilization is doomed if the unheard-of actions of our younger generations are allowed to continue 1883-1900 Lost generation 1901-1924 GI generation 1925-1945 Silent generation 1946-1964 Baby Boomers 1965-1983 Generation X 1984-present ? Millennial Baby Boomers - importance - Size - Self absorption- Challenged established norms - Grew up with TV Marketing’s fascination with youth Millennial –
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