Professional Documents
Culture Documents
INTRODUCTION AND OBJECTIVES OF THIS CHAPTER: IN THIS CHAPTER WE ARE GOING TO DISCUSS IN DETAIL THAT HOW A MARKETER SEGMENTS THE OVERALL MARKET IN TO SMALLER BUT HOMOGENIOUS SEGMENTS, WHAT ARE THE DIFFERENT RULES FOR SEGMENTATION, WHAT IS THE CRITERIA FOR SEGMENTATION, AND HOW PRODUCT POSITIONING EFFORTS ARE BEING PERFORMED.
THE PROCESS OF DIVIDING A MARKET INTO DISTINCT SUBSETS OF CONSUMERS WITH COMMON NEEDS OR CHARACTERISTICS AND SELECTING ONE OR MORE TO TARGET
EXAMPLES
CARS
Luxury Cheap Sporty Spacey/Specious
EXAMPLES
FOOD
Continental Chinese Indian/Pakistani Italian
Arabian
EXAMPLES
CLOTHES
Formal Informal Party Wear Male Female Traditional Fusion Bridal Wear
MUSIC
PoP
Jazz
Salsa
Disco
Rock
R&B
13 lodging brand Fairfield Inns (prices conscious people) Spring Hill Suites (modestly priced) Residence Inns (apartment like accommodation) Courtyard (price conscious Business people) Marriott Hotels (full service business travelers) Marriott Resorts (leisure & vocational accommodation)
Benefit Segmentation
Hybrid Segmentation Approaches Psychographic-Demographic Geodemographic
GOEGRAPHIC SEGMENTATION
GEOGRAPHIC SEGMENTATION THE MARKET IS DIVIDED BY LOCATION. PEOPLE WHO LIVE IN THE SAME AREA SHARE SOME SIMILAR NEEDS AND WANTS DIFFER FROM THOSE OF PEOPLE LIVING IN OTHER AREAS. CERTAIN FOOD PRODUCTS STARBUCKS COFFEE (WWW.STARBUCKS.COM), WHOSE FIRST STORE OPENED SEATTLE IN 1971. NEARLY 20 YEARS LATER, AFTER A RAPID EXPANSION INTO THE EASTERN STATES DURING THE 1990S, STARBUCKS DECIDED TO INTRODUCE THE MILDER DIMENSIONS LINE COFFEES IN 1998 TO BETTER SATISFY ITS EAST COAST CONSUMERS WHO TEND TO PREFER A MILDER COFFEE THAN THEIR WEST COAST
SOME MARKETING SCHOLARS HAVE ARGUED THAT DIRECT-MAIL MERCHANDISE CATALOGS, NATIONAL TOLL-FREE TELEPHONE NUMBERS, SATELLITE TELEVISION TRANSMISSION, GLOBAL COMMUNICATION NETWORKS, AND ESPECIALLY THE INTERNET HAVE ERASED ALL REGIONAL BOUNDARIES AND THAT GEOGRAPHIC SEGMENTATION SHOULD BE REPLACED BY A SINGLE GLOBAL MARKETING STRATEGY.
PSYCHOGRAPHIC (LIFESTYLE) SEGMENTATION DOORS STATUS SEEKERS SOCIO CULTURAL SEGMENTATION CULTURES FRENCH, PAKISTANI RELIGION OTHER SUBCULTURES (RACE/ETHNIC) HISPANIC SOCIAL CLASS FAMILY LIFE CYCLE NESTERS, EMPTY NESTERS USE-RELATED SEGMENTATION USAGE RATE NONUSERS AWARENESS STATUS ENTHUSIASTIC BRAND LOYALTY USE-SITUATION SEGMENTATION TIME OBJECTIVE LOCATION PERSON PEER BENEFIT SEGMENTATION LASTING, FOR-THE-MONEY HYBRID SEGMENTATION DEMOGRAPHIC/PSYCHOGRAPHIC
ECONOMY-MINDED, COUCH POTATOES, OUT ENTHUSIASTS, AMERICAN, ITALIAN, CHINESE, MEXICAN, CATHOLIC, PROTESTANT, JEWISH, MOSLEM, AFRICAN AMERICAN, CAUCASIAN, ASIAN, LOWER, MIDDLE, UPPER BACHELORS, YOUNG MARRIED, FULL HEAVY USERS, MEDIUM USERS, LIGHT USERS, UNAWARE, AWARE, INTERESTED, NONE , SOME, STRONG LEISURE, WORK, RUSH, MORNING, NIGHT PERSONAL, GIFT, SNACK, FUN, ACHIEVEMENT HOME, WORK, FRIENDS HOME, IN-STORE SELF, FAMILY MEMBERS, FRIENDS, BOSS, CONVENIENCE, SOCIAL ACCEPTANCE, LONG ECONOMY, VALUECOMBINATION OF DEMOGRAPHIC AND
DEMOGRAPHIC SEGMENTATION
AGE, GENDER, MARITAL STATUS, INCOME, OCCUPATION AND EDUCATION, ARE MOST OFTEN USED AS THE BASIS FOR MARKET SEGMENTATION. REFERS TO THE VITAL AND MEASURABLE STATISTICS OF A POPULATION. HELP TO LOCATE A TARGET MARKET. DEMOGRAPHIC INFORMATION IS OFTEN THE MOST ACCESSIBLE AND COST-EFFECTIVE WAY TO IDENTIFY A TARGET MARKET. MOST SECONDARY DATA, INCLUDING CENSUS DATA, ARE EXPRESSED IN DEMOGRAPHIC TERMS.
AGE
PRODUCT NEEDS AND INTERESTS OFTEN VARY WITH CONSUMERS AGE. FOR EXAMPLE, ALTHOUGH CHILDREN OFTEN CONSUME BOXED JUICE DRINKS, MINUTE MAID COMPANY (WWW.MINUTEMAID.COM) OFFERS SINGLE-SERVE DRINKS IN POUCHES, RATHER THAN BOXES, IN ORDER TO BETTER APPEAL TO THE TWEEN MARKETS.
GENDER
GENDER IS QUITE FREQUENTLY A DISTINGUISHING SEGMENTATION VARIABLE. WOMEN HAVE TRADITIONALLY BEEN THE MAIN USERS OF SUCH PRODUCTS AS HAIR COLORING AND COSMETICS, AND MEN HAVE BEEN THE MAIN USERS OF TOOLS AND SHAVING PREPARATIONS.
MARITAL STATUS
TRADITIONALLY, THE FAMILY HAS BEEN THE FOCUS OF MOST MARKETING EFFORTS, AND FOR MANY PRODUCTS AND SERVICES, THE HOUSEHOLD CONTINUES TO BE THE RELEVANT CONSUMING UNIT. MARKETERS ARE INTERESTED IN THE NUMBER AND KINDS OF HOUSEHOLDS THAT BUY AND/OR OWN CERTAIN PRODUCTS. MARKETERS HAVE DISCOVERED THE BENEFITS OF TARGETING SPECIFIC MARITAL STATUS GROUPINGS, SUCH AS SINGLES DIVORCED INDIVIDUALS, SINGLE PARENTS AND DUAL-INCOME MARRIED COUPLES.
INCOME IS OFTEN COMBINED WITH OTHER DEMOGRAPHIC VARIABLES TO MORE ACCURATELY DEFINE TARGET MARKETS. TO ILLUSTRATE, HIGH INCOME HAS BEEN COMBINED WITH AGE TO IDENTIFY THE IMPORTANT AFFLUENT ELDERLY SEGMENT. IT ALSO HAS BEEN COMBINED WITH BOTH AGE AND OCCUPATIONAL STATUS TO PRODUCE THE SO-CALLED YUPPIE SEGMENT, A SOUGHT-AFTER SUBGROUP OF THE BABY BOOMER MARKET.
EDUCATION, OCCUPATION, AND INCOME TEND TO BE CLOSELY CORRELATED IN ALMOST A CAUSEAND-EFFECT RELATIONSHIP. HIGHLEVEL OCCUPATIONS THAT PRODUCED HIGH INCOMES USUALLY REQUIRE ADVANCED EDUCATIONAL TRAINING. INDIVIDUALS WITH LITTLE EDUCATION RARELY QUALIFY FOR HIGH-LEVEL JOBS.
PSYCHOGRAPHIC SEGMENTATION
PSYCHOGRAPHIC PROFILE OF A CONSUMER SEGMENT CAN BE THOUGHT OF AS A COMPOSITE OF CONSUMERS MEASURED ACTIVITIES, INTERESTS AND OPINIONS (AIOS). AS AN APPROACH TO CONSTRUCTING CONSUMER PSYCHOGRAPHIC PROFILES, AIO RESEARCH SEEDS CONSUMERS RESPONSES TO A LARGE NUMBER OF STATEMENTS THAT MEASURE ACTIVITIES.
E.G., GOLFING, VOLUNTEERING AT A LOCAL BLOOD BAND, GARDENING, INTERESTS (THE CONSUMERS OR FAMILYS PREFERENCES AND PRIORITIES, E.G., HOME, FASHION, FOOD) AND OPINIONS (HOW CONSUMER FEELS ABOUT A WIDE VARIETY OF EVENTS AND POLITICAL ISSUES, SOCIAL ISSUES, THE STATE OF THE ECONOMY, ECOLOGY.
SOCIOCULTURAL SEGMENTATION
FAMILY LIFE CYCLE SEGMENTATION IS BASED ON THE PREMISE THAT MANY FAMILIES PASS THROUGH SIMILAR PHASES IN THEIR FORMATION, GROWTH AND FINAL DISSOLUTION. AT EACH PHASE, THE FAMILY UNIT NEEDS DIFFERENT PRODUCTS AND SERVICES. YOUNG SINGLE PEOPLE, FOR EXAMPLE, NEED BASIC FURNITURE FOR THEIR FIRST APARTMENT, WHEREAS THEIR PARENTS, FINALLY FREE OF CHILD REARING, OFTEN REFURNISH THEIR HOMES WITH MORE ELABORATE PIECES.
EACH OF THE STAGES IN THE TRADITIONALLY FAMILY LIFE CYCLE (BACHELORHOOD, HONEYMOONERS, PARENTHOOD, POSTPARENTHOOD, AND DISSOLUTION) REPRESENTS AN IMPORTANT TARGET SEGMENT TO A VARIETY OF MARKETERS.
USE-RELATED SEGMENTATION
AN EXTREMELY POPULAR AND EFFECTIVE FORM OF SEGMENTATION CATEGORIZES CONSUMERS IN TERMS OF PRODUCT, SERVICE, OR BRAND USAGE CHARACTERISTICS, SUCH AS LEVEL OF USAGE, LEVEL OF AWARENESS, AND DEGREE OF BRAND LOYALTY. RATE OF USAGE SEGMENTATION DIFFERENTIATES AMONG HEAVY USERS, MEDIUM USERS, LIGHT USERS, AND NONUSERS OF A SPECIFIC PRODUCT, SERVICE OR BRAND.
HEAVY USERS OF TRAVEL AGENTS IN SINGAPORE WERE MORE INVOLVED WITH AND MORE ENTHUSIASTIC ABOUT VACATION TRAVEL, MOTE INNOVATIVE WITH REGARD TO THEIR SELECTION OF VACATION TRAVEL PRODUCTS, MORE LIKELY TO TRAVEL FOR PLEASURE AND MORE WIDELY EXPOSED TO TRAVEL INFORMATION FROM MASS MEDIA. AWARENESS STATUS ENCOMPASSES THE NOTION OF CONSUMER AWARENESS OF THE PRODUCT, INTEREST LEVEL IN THE PRODUCT, READINESS TO BUY THE PRODUCT, OR WHETHER CONSUMERS NEED TO BE INFORMED ABOUT HE PRODUCT. AD FOR CAMPBELLS TOMATO SOUP THAT DESIGNED TO CREATE BOTH AWARENESS AND INTEREST AMONG CONSUMERS WHO ARE INTERESTED IN REDUCING THEIR RISK OF CANCER.
SOMETIMES BRAND LOYALTY IS USED AS THE BASIS FOR SEGMENTATION. MARKETERS OFTEN TRY TO IDENTIFY THE CHARACTERISTICS OF THEIR BRANDLOYAL CONSUMERS SO THAT THEY CAN DIRECT THEIR PROMOTIONAL EFFORTS TO PEOPLE WITH SIMILAR CHARACTERISTICS IN THE LARGER POPULATION. INCREASINGLY, MARKETERS STIMULATE AND REWARD BRAND LOYALTY BY OFFERING SPECIAL BENEFITS TO CONSISTENT OR FREQUENT COSTUMERS. SUCH FREQUENT USAGE OR RELATIONSHIP PROGRAMS OFTEN TAKE THE FORM OF A MEMBERSHIP CLUB (E.G. HERTZ NUMBER 1 CLUB GOLD, AMERICAN AIRLINES, PLATINUM LEVEL, OR MARRIOTT'S REWARDS.)
USAGE-SITUATION SEGMENTATION
OCCASION OR SITUATION OFTEN DETERMINES WHAT CONSUMERS WILL PURCHASE OR CONSUME. WHEN I AM AWAY ON BUSINESS FOR A WEEK OF MORE, I TRY TO STAY AT SUITES HOTEL. I ALWAYS BUY MY WIFE FLOWERS ON VALENTINES DAY. THE GREETING CARD INDUSTRY, FOR EXAMPLE, STRESSES SPECIAL CARDS FOR A VARIETY OF OCCASIONS THAT SEEM TO BE INCREASING ALMOST DAILY (GRANDPARENTS DAY, SECRETARIES DAY ETC.)
DIAMOND INDUSTRY PROMOTE DIAMOND RINGS AS AN ENGAGEMENT SYMBOL. THE GODIVA CHOCOLATE AD IN FIGURE 3-4 (WWW.GODIVA.COM) IS AN EXAMPLE OF SITUATIONAL, SPECIAL USAGE OF SEGMENTATION. IT APPEARED IN MAGAZINES A WEEK PRIOR TO VALENTINES DAY AND SUGGEST THAT A BOX OF GODIVA CHOCOLATE WILL MAKE HER HEART SKIP A BEAT.
BENEFIT SEGMENTATION
MARKETING AND ADVERTISING EXECUTIVES CONSTANTLY ATTEMPT TO IDENTIFY THE ONE MOST IMPORTANT BENEFIT OF THEIR PRODUCT OR SERVICES THAT WILL BE MOST MEANINGFUL TO CONSUMERS. EXAMPLES OF BENEFITS THAT ARE COMMONLY USED INCLUDE FINANCIAL SECURITY (PRUDENTIAL FINANCIAL) DATE PROTECTION (IOMEGA) GOOD HEALTH (WHEATIES) FRESH BREATH (ECLIPSE GUM) AND PEACE OF MIND (HEFTY ONE ZIP BAGS). CREST WHITENING PLUS SCOPE TOOTHPASTE (WWW.CREST.COM ARE WHITER TEETH AND FRESH BREATH.
GEODEMOGRAPHIC SEGMENTATION
PEOPLE WHO LIVE CLOSE TO ONE ANOTHER ARE LIKELY TO HAVE SIMILAR FINANCIAL MEANS, TASTES, PREFERENCES, LIFESTYLES AND CONSUMPTION HABITS. CLUSTERS ARE CREATED BASED ON CONSUMER LIFESTYLES, AND SPECIFIC CLUSTER INCLUDES ZIP CODES THAT ARE COMPOSED OF PEOPLE WITH SIMILAR LIFESTYLES WIDELY SCATTERED THROUGHOUT THE COUNTRY
MARKETERS USE THE CLUSTER DATE FOR DIRECT-MAIL CAMPAIGNS, TO SELECT RETAIL SITES AND APPROPRIATE MERCHANDISE MIXES, TO LOCATE BANKS AND RESTAURANTS, AND TO DESIGN MARKETING STRATEGIES FOR SPECIFIC MARKET SEGMENTS. GEODEMOGRAPHIC SEGMENTATION IS MOST USEFUL WHEN AN ADVERTISERS OR MARKETER'S BEST PROSPECT (IN TERMS OF CONSUMER PERSONALITIES, GOALS AND INTERESTS) CAN BE ISOLATED IN TERMS OF WHERE THEY LIVE.
1. IDENTIFICATION
TO DIVIDE THE MARKET INTO SEPARATE SEGMENTS ON THE BASIS OF A SERIES OF COMMON SHARED NEEDS OR CHARACTERISTICS THAT ARE RELEVANT TO THE PRODUCT OR SERVICE. SEGMENTATION VARIABLES, SUCH AS GEOGRAPHY (LOCATION) OR DEMOGRAHICS (AGE, GENDER, OCCUPATION, RACE) ARE RELATIVELY EASY TO IDENTIFY OR ARE EVEN ABSERVABLE. EDUCATION INCOME OR MARITAL STATUS, CAN BE DETERMINED THROUGH QUESTIONNAIRIES.
2. SUFFICIENCY
FOR MARKET SEGMENT TO BE A WORTHWHILE TARGET, IT MUST CONSIST OF A SUFFICIENT NUMBER OF PEOPLE WARRANT TAILORING A PRODUCT OR PROMOTIONAL CAMPAIGN TO ITS SPECIFIC INTEREST. CENSUS BUREAU (AVAILABLE AT MANY LIBRARIES AND ONLINE VIA THE INTERNET)
3. STABILITY
MOST MARKETERS PREFER TO TARGET CONSUMER SEGMENTS THAT ARE RELATIVELY STABLE IN TERMS OF DEMOGRAPHIC AND PSYCHOLOGICAL FACTORS AND NEED AND THAT ARE LIKELY TO GROW LARGER OVER TIME.
4. ACCESSIBILITY
A FOURTH REQUIREMENT FOR EFFECTIVE TARGETING IS ACCESSIBILITY, WHICH MEANS THAT MARKETERS MUST BE ABLE TO REACH THE MARKET SEGMENTS THEY WANT TO TARGET IN AN ECONOMICAL WAY.
MARKET. E.G GASOLINE, (FUEL), SALT, SUGAR, VEGETABLES, SUGAR, ETC,THIS STRATEGY IS SUITABLE FOR THOSE FIRMS WHICH ARE PRODUCING UNDIFFERENTIATED PRODUCTS. THE ADVANTAGE OF THIS STRATEGY IS THAT, A FIRM CAN MINIMIZE ITS OVERALL COST, INCLUDING PROMOTIONAL COST,
WAREHOUSING COST, TRANSPORTATION COST, AND LOWER PRODUCTION COSTS, BECAUSE THE TOTLA MARKET IS HERE IS BEING TREATED AS A SINGLE SEGMENT. SINGLE SEGMENT STRATEGY: IT REFERS TO SELECTING A SINGLE SEGMENT AS A TARGET MARKET FROM THE WHOLE MARKET, AND ONE MARKETING MIX IS BEING DEVELOPED FOR
THEM,THIS STRATEGY ENABLES MARKETERS TO ACQUIRE SPECIALIZATION OR REPUTATION AS A SPECIALIST IN MARKET. E.G MERCEDEZ CAR TARGETING UPPER CLASS, SUZUKI TARGETING MIDDLE CLASS, THE DISADVANTAGE OF THIS STRATEGY IS THAT THE MARKETER HAS GOT ALL THE EGGS IN A SINGLE BASKET,
MEANS ALL THE BUSINESS SUCCESS IS DEPENDING UPON THE SINGLE SEGMENT WITH LIMITED PRODUCTS AND OTHER POTENTIAL MARKET SEGMENTS ARE NOT CONSIDERED AS TARGET MARKETS. MULTIPLE SEGMENT STRATEGY UNDER THIS STRATEGY TWO OR THAN 2 SEGMENTS OF CONSUMERS ARE TREATED AS
TARGET MARKETS, AND A SEPARATE MARKETING MIX IS BEING DEVELOPED FOR EACH SELECTED TARGET MARKET,E.G SUNSILK SHAMPOO OFFERS 5 VARAITIONS IN ITS PRODUCT LINE, (FOR NORMAL, DULL, DRY, SHINNY, AND DAMAGED HAIR).
THIS STRATEGY RESULTS IN GREATER VOLUME OF SALES, AS MORE SEGMENTS ARE BEING TARGETED, BUT ITS INEFFECTIVE IN TERMS OF COST AND MARKET COVERAGE GUIDELINES FOR SELECTING A TARGET MARKET: DEMAND, PURCHASING ABILITY AND WILLING NESS TO BUY.
COMPANY SHOULD HAVE ENOUGH RESOURCES TO FULFILL THEIR DEMAND. SUFFICINCY COMPETITION SHOULD NOT BE THAT MUCH TOUGH. STABILITY.
POSITIONING
POSITIONING STRATEGIES: POSITIONING IN RELATION TO COMPETITORS POSITIONING IN RELATION TO A PRODUCT CLASS SPECIAL ATTRIBUTE: POSITIONING BY PRICE AND QUALITY BY: ADIL ADNAN. IQRA UNIVERSITY