chapter 3 marketing segmentation. ©2000 prentice hall what is marketing segmentation? who uses...
TRANSCRIPT
Chapter 3
Marketing Segmentation
©2000 Prentice Hall
What is Marketing Segmentation?
• Who uses market segmentation?• How does market segmentation operate?
©2000 Prentice Hall
Market Market SegmentationSegmentation
The process of dividing a potential market into distinct
subsets of consumers and selecting one or more
segments as a target market to be reached with a distinct
marketing mix.
©2000 Prentice Hall
Mass Mass MarketingMarketing
Offering the same product and marketing mix to all
consumers.
©2000 Prentice Hall
PositioningPositioningEstablishing a specific image
for a brand in relation to competing brands.
©2000 Prentice Hall
Who Uses Market Segmentation?
• Marketers of consumer goods• Retailers• Hotels• Industrial Manufacturers
©2000 Prentice Hall
RepositioningRepositioning
Changing the way a product is perceived by consumers in
relation to other brands or product uses.
©2000 Prentice Hall
Bases for Segmentation
• Geographic Segmentation• Demographic Segmentation• Psychological Segmentation• Psychographic Segmentation• Sociocultural Segmentation• Use-Related Segmentation• Usage-Situation Segmentation• Benefit Segmentation• Hybrid Segmentation Approaches
©2000 Prentice Hall
Table 3.1 Market Segmentation Categories and Selected Variables
SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic Segmentation
Climate
Density of area
City Size
Region Southwest, Mountain States, Alaska, Hawaii
Major metropolitan areas, small cities, towns
Urban, suburban, exurban, rural
Temperate, hot, humid, rainy
Demographic Segmentation
Income
Marital statusSexAge Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Male, femaleSingle, married, divorced, living together, widowed
Under $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and over
Occupation
Education Some high school, high school graduate, some college, college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural, military
©2000 Prentice Hall
Table 3.1 continued
SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESPsychological Segmentation
Learning-involvement
Perception
Personality
Needs-motivation Shelter, safety, security, affection, sense of self-worth
Extroverts, novelty seeker, aggressives, low dogmatics
Low-risk, moderate-risk, high-risk
Low-involvement, high-involvement
Psychographic
Subcultures (Race/ethnic)
Religion
Cultures
(Lifestyle) Segmentation Economy-minded, couch potatoes outdoors enthusiasts status seekers
American, Italian, Chinese, Mexican, French, Pakistani
Catholic, Protestant, Jewish, Moslem, other
African-American, Caucasian, Asian, Hispanic
Family life cycle
Social class Lower, middle, upper
Bachelors, young married, full nesters, empty nesters
Attitudes Positive attitude, negative attitude
Sociocultural Segmentation
©2000 Prentice Hall
Table 3.1 continued
SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESUse-Related Segmentation
Brand loyalty
Awareness status
Usage rate Heavy users, medium users, light users, non users
Unaware, aware interested, enthusiastic
None, some, strong
Use-Situation Segmentation
Location
Objective
Time Leisure, work, rush, morning, night
Personal, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Person Self, family members, friends, boss, peer
Benefit Segmentation Convenience, social acceptance, long lasting, economy,value-for-the-money
©2000 Prentice Hall
Table 3.1 continued
SEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLES
Geodemographics “Money and Brains,” “Black Enterprise,” “Old Yankee Rows,” “Downtown Dixie-Style”
Demographic/psychographic Combination of demographic and psychographic profiles of consumer segments profiles
SRI VALSTM Actualizer, fulfilled, believer, achiever, striver, experiencer, maker, struggler
Hybrid Segmentation
VALSTM is an example of a demographic/psychographic profile. PRIZM is an example of a geodemographic profile.
©2000 Prentice Hall
Geographic Geographic SegmentationSegmentation
The division of a total potential market into smaller
subgroups on the basis on geographic variables (e.g.,
region, state, or city).
©2000 Prentice Hall
Micro-Micro-marketingmarketing
Highly regionalized marketing strategies that use advertising and promotional
campaigns specifically geared to local market needs
and conditions.
©2000 Prentice Hall
Demographic Segmentation
• Age• Sex• Marital Status• Income, Education, and Occupation
©2000 Prentice Hall
Age
• Age effects– occurrences due to chronological age
• Cohort effects– occurrences due to growing up during a specific
time period
©2000 Prentice Hall
Sex
• Traditional roles of men and women in purchases
• Changing sex roles– Dual-income households
• Working women less accessible through traditional media
©2000 Prentice Hall
Marital Status
• Households as a consuming unit– Singles– divorced– single parents– dual-income married
©2000 Prentice Hall
Income, Education, and Occupation
• Income often combined with other variables for segmentation
• The three variables tend to be correlated
©2000 Prentice Hall
Psychological Segmentation
• Motivations• Personality• Perceptions• Learning• Attitudes
©2000 Prentice Hall
AIOsAIOs
Psychographic variables that focus on activities, interests, and opinions. Also referred
to as Lifestyle.
©2000 Prentice Hall
Table 3.2 A Portion of an AIO Inventory Used to Identify Techno-Road-Warriors
Instructions: Please read each statement and place an “x” in the box that best indicates how strongly you “agree” or “disagree” with the statement.
I feel that my life is moving faster and faster, sometimes just too fast.
If I could consider the “pluses” and “minuses,” technology has been good for me.
I find that I have to pull myself away from e-mail.
Given my lifestyle, I have more of a shortage of time than money.
I like the benefits of the Internet, but I often don’t have the time to take advantage of them.
I am generally open to considering new practices and new technology.
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
[1] [2] [3] [4] [5] [6] [7]
Agree Completely
Disagree Completely
©2000 Prentice Hall
Table 3.3 A Hypothetical Psychographic Profile of the Techno-Road-Warrior
•Goes on the Internet 6-plus times a week•Sends and/or receives 15 or more e-mail messages a week•Regularly visits Web sites to gather information and/or to comparison shop
•Often buys personal items via 800 numbers and/or over the Internet
•May trade stocks and/or make travel reservations over the Internet
•Earns $100,000 or more a year•Belongs to several rewards programs (for example, frequent flyer programs, hotel programs, rent-a-car programs)
©2000 Prentice Hall
Sociocultural Segmentation
• Family Life Cycle• Social Class• Culture, Subculture, and Cross-Culture
©2000 Prentice Hall
Family Life Cycle
• Phases a family goes through in their formation, growth, and final dissolution– Bachelorhood– Honeymooners– Parenthood– Post-parenthood– Dissolution
©2000 Prentice Hall
Culture, Subculture, an Cross-Culture
• Segmenting on the basis of cultural heritage– assumes members of the same culture share the
same values, beliefs, and customs• Subcultures are united by certain experiences,
values, or beliefs.– e.g., Hispanic subculture, African American
subculture, etc.
©2000 Prentice Hall
Use-Related Segmentation
• Rate of Usage– Heavy vs. Light
• Awareness Status– Aware vs. Unaware
• Brand Loyalty– Brand Loyal vs. Brand Switchers
©2000 Prentice Hall
Usage-Situation Segmentation
• Segmenting on the basis of special occasions or situations
©2000 Prentice Hall
Benefit Segmentation
• Segmenting on the basis of the most important benefit sought by consumers when purchasing the product or service– Toothpaste can be bought for
• Good Taste (e.g., Colgate)• Fresh Breath (e.g, Close Up)• White Teeth (e.g, Rembrandt)• Cavity Protection (e.g., Crest)
©2000 Prentice Hall
Hybrid Segmentation Approaches
• Psychographic-Demographic Profiles• Geodemographic Segmentation• SRI Consulting’s Values and Lifestyle System
(VALSTM)
©2000 Prentice Hall
Table 3.4 Selected Psychographic/Demographic Characteristics of the PC Magazine Subscriber
DEMOGRAPHICSDEMOGRAPHICS PercentPercent
SEX (BASE 990)Men 86Women 13
PSYCHOGRAPHICSPSYCHOGRAPHICS PercentPercent
USE A COMPUTER 100At home 96At work 89On vacation/traveling 46AGE
Under 25 525 - 34 1835 - 44 2945 - 54 3155 - 64 1265 or older 5Mean age 44.1
SELECTED USE OF COMPUTERWord Processing 96Connect to Internet 86E-mail 84For work 80Accounting/record keeping 75Reference 68Recreation/games 66
©2000 Prentice Hall
Table 3.4 continued
DEMOGRAPHICSDEMOGRAPHICS PercentPercent PSYCHOGRAPHICSPSYCHOGRAPHICS PercentPercent
EDUCATIONSome college or less 27Graduate college 27Education beyond college graduate 46
EMPLOYMENT STATUSEmployed by someone else 68Self-employed 21Other 11
PORTABLE DEVICES USES WHEN TRAVELING ON BUSINESSLaptop/notebook computer 57Cellular phone 47Beeper or pager 30Personal Digital Assistant/ electronic organizer 14
©2000 Prentice Hall
Table 3.4 continued
DEMOGRAPHICSDEMOGRAPHICS PercentPercent PSYCHOGRAPHICSPSYCHOGRAPHICS PercentPercent
OCCUPATION/BUSINESS DEPT.Computer related- professional 22Senior or corporate management 16Engineering-related professional 13Administrative/ manufacturing, accounting, finance, purchasing, advertising, marketing, sales 26Others 23
TRAVEL FOR BUSINESS/PLEASUREBusiness Travel5 or more days per month 315 or more nights away from home per month 17Pleasure/Vacation Travel15 or more days per year 37Mean number of days per year 15.5
MEMBER OF FREQUENT FLYER PROGRAMS 90
©2000 Prentice Hall
Table 3.4 continued
DEMOGRAPHICS Percent PSYCHOGRAPHICS Percent
INCOMEUnder $30,000 7$30,000 - $49,999 15$50,000 - $74,999 24$75,000 - $99,999 19$100,000 or more 24Mean income $87,700
PRIMARY RESIDENCEOwn 74Rent 18Other 3No answer 5
FINANCIAL SERVICESCurrently ownMutual funds 48Stocks 44Bonds 24Life insurance/annuities 44Currently useBrokerage services 36On-line investment services 16Retirement/financial planning 41
©2000 Prentice Hall
Table 3.4 continued
RESPONSE OF SELECTED CONSUMER PSYCHOGRAPHIC STATEMENTS Percent
Research before choose brand of new product to buy 41Other people ask my opinion about which computer products to buy 41Usually buy products based on quality, not price 26Prefer products that are latest in new technology 26Among group I am one of first to try new product 19
Walking/running/jogging 63Exercise/fitness/weight training 44Bicycling 7Swimming 37Golf 27Fishing 23Boating/sailing 19Skiing 19Tennis 14
SELECTED SPORTS/ACTIVITES PLAYED/PARTICIPATED IN PAST YEAR Percent
©2000 Prentice Hall
Table 3.4 continued
Listen to music 77Reading 61Going to movies 60Surfing the Internet 50Games-videos on computer 48Gardening 32Going to the theater 32Cooking 30Photography 30Collecting stamps/coins 11Sewing needlecraft 6
HOBBIES/OTHER ACTIVITIES PARTICIPATED IN Percent
Source: 1997 Lifestyles Study, PC Magazine Subscriber Study, Ziff-Davis,
Inc., June 1997.
©2000 Prentice Hall
Table 3.5 Sample Geodemographic Clusters
BLUE BLOOD ESTATES•0.8% of United States households•Predominant employment: Professional•Elite super-rich families•Key education level: College grads•Adult age range: 35-44, 45-54, 55-64
Characteristics: America’s wealthiest suburbs are populated by established executives, professional, and heirs to “old money.” These people are accustomed to privilege and live in luxury, often surrounded by servants. A tenth of this group are multimillionaires. The next level of affluence is a sharp drop from this pinnacle. Blue blood estate people belong to a country club, own mutual funds ($10,000+), purchase a car phone, watch TV golf, and read business magazines.
BLUE BLOOD ESTATES•0.8% of United States households•Predominant employment: Professional•Elite super-rich families•Key education level: College grads•Adult age range: 35-44, 45-54, 55-64
Characteristics: America’s wealthiest suburbs are populated by established executives, professional, and heirs to “old money.” These people are accustomed to privilege and live in luxury, often surrounded by servants. A tenth of this group are multimillionaires. The next level of affluence is a sharp drop from this pinnacle. Blue blood estate people belong to a country club, own mutual funds ($10,000+), purchase a car phone, watch TV golf, and read business magazines.
©2000 Prentice Hall
Table 3.5 continued
MID-CITY MIX•1.3% of United States households•Predominant employment: Service, white-collar•African American Singles and families•Key educational level: High school, some college•Adult age range: 35-54
Characteristics: These individuals and families are geographically centered in the Northeast and Great Lakes regions. They are above average ethnic diversity and a mix of white- and blue-collar employment. These rowhouse neighborhoods on the urban fringe are two-thirds black and have a high incidence of college enrollment. They go to pro basketball games, have veterans life insurance, eat canned hashes, listen to religious/gospel music, and read fashion/sports magazines.
MID-CITY MIX•1.3% of United States households•Predominant employment: Service, white-collar•African American Singles and families•Key educational level: High school, some college•Adult age range: 35-54
Characteristics: These individuals and families are geographically centered in the Northeast and Great Lakes regions. They are above average ethnic diversity and a mix of white- and blue-collar employment. These rowhouse neighborhoods on the urban fringe are two-thirds black and have a high incidence of college enrollment. They go to pro basketball games, have veterans life insurance, eat canned hashes, listen to religious/gospel music, and read fashion/sports magazines.
©2000 Prentice Hall
Table 3.5 continued
GRAY COLLARS•2.1% of United States households•Adult age range: 55-64, 65+•Median household income: $31,400•Aging couples in inner suburbs
Characteristics: For nearly two decades, we read about the decline of the Great Lakes industrial “Rust Belt,” Decimated by foreign takeovers in the steel and automobile industries, the area lost a million jobs. Although most of the kids left, their highly skilled parents stayed and are now benefiting from a major U.S. industrial resurgence. They buy 1950’s nostalgia, own CDs, eat canned cooked hams, listen to radio football, and read health/fitness magazines.
GRAY COLLARS•2.1% of United States households•Adult age range: 55-64, 65+•Median household income: $31,400•Aging couples in inner suburbs
Characteristics: For nearly two decades, we read about the decline of the Great Lakes industrial “Rust Belt,” Decimated by foreign takeovers in the steel and automobile industries, the area lost a million jobs. Although most of the kids left, their highly skilled parents stayed and are now benefiting from a major U.S. industrial resurgence. They buy 1950’s nostalgia, own CDs, eat canned cooked hams, listen to radio football, and read health/fitness magazines.
©2000 Prentice Hall
Table 3.5 continued
YOUNG INFLUENTIALS•1.1% of United States households•Predominant employment: Professional, white-collar•Upwardly mobile singles and couples•Key education level: College grads•Adult age range: 24, 25-34
Characteristics: This cluster is dubbed the “Young Urban Professional.” Before getting married they were the educated, high-tech, metropolitan sophisticates, the “swingers” and childless live-in couples, whose double incomes bought the good life in Boomtown U.S.A. They are the last of the Yuppies. They go to college basketball games, have an American Express card, often drink imported beer, listen to progressive rock radio, and read style/fashion magazines.
YOUNG INFLUENTIALS•1.1% of United States households•Predominant employment: Professional, white-collar•Upwardly mobile singles and couples•Key education level: College grads•Adult age range: 24, 25-34
Characteristics: This cluster is dubbed the “Young Urban Professional.” Before getting married they were the educated, high-tech, metropolitan sophisticates, the “swingers” and childless live-in couples, whose double incomes bought the good life in Boomtown U.S.A. They are the last of the Yuppies. They go to college basketball games, have an American Express card, often drink imported beer, listen to progressive rock radio, and read style/fashion magazines.
©2000 Prentice Hall
Table 3.5 continued
SHOTGUNS AND PICKUPS•1.6% of United States households•Predominant employment: Blue-collar, farm•Rural blue-collar workers and families•Key education level: High school grade school•Adult age range: 35-44, 45-54
Characteristics: The least affluent of the “Country Families” clusters, members of this group are found in the Northeast, the Southeast, in the Great Lakes and Piedmont industrial regions. They lead the “Country Families” group in blue-collar jobs; the majority are married with school-age children. They are church-goers who also enjoy bowling, hunting, sewing, and attending auto races, smoke pipe tobacco, have medical loss of income insurance, drink Canadian whisky, listen to country radio, and read hunting/car & truck magazines.
SHOTGUNS AND PICKUPS•1.6% of United States households•Predominant employment: Blue-collar, farm•Rural blue-collar workers and families•Key education level: High school grade school•Adult age range: 35-44, 45-54
Characteristics: The least affluent of the “Country Families” clusters, members of this group are found in the Northeast, the Southeast, in the Great Lakes and Piedmont industrial regions. They lead the “Country Families” group in blue-collar jobs; the majority are married with school-age children. They are church-goers who also enjoy bowling, hunting, sewing, and attending auto races, smoke pipe tobacco, have medical loss of income insurance, drink Canadian whisky, listen to country radio, and read hunting/car & truck magazines.
Source: Courtesy of Claritas Inc. (PRIZM and 62 Cluster nicknames are registered trademarks of Claritas Inc.). Reprinted by permission.
©2000 Prentice Hall
Fig
ure
3-1
0:S
RI C
on
sult
ing
’s V
alu
es a
nd
L
ifes
tyle
Sys
tem
(V
AL
ST
M) ACTUALIZERS
STRUGGLERS
FULFILLEDS
BELIEVERS
ACHIEVERS EXPERIENCERS
STRIVERS MAKERS
Low Resources
High Resources
Action OrientedStatus OrientedPrinciple Oriented
©2000 Prentice Hall
Figure 3.11 VALSTM 2 Segments and Participation in Selected Sports
Percent of adults in each VALS 2 type who participated in selected sports in 1995.
0 2 4 6 8 10 12 14
Strugglers
Believers
Strivers
Fulfilleds
Makers
Achievers
Experiencers
Actualizers
Mountain/rock climbing Jet skiing/wave running/water biking Inline skating
©2000 Prentice Hall
Table 3.6 The Size of Each VALSTM Segment as Percent of the United States
Population
VALSVALSTMTM SEGMENT SEGMENTPERCENT OF PERCENT OF POPULATIONPOPULATION
Actualizer10.511.7%
StrugglerMakerExperiencerStriverAchieverBelieverFulfilled
9.512.012.911.814.717.0
©2000 Prentice Hall
Criteria For Effective Targeting of Market Segments
• Identification• Sufficiency• Stability• Accessibility
©2000 Prentice Hall
Implementing Segmentation Strategies
• Concentrated Versus Differentiated Marketing• Countersegmentation
©2000 Prentice Hall
Counterseg-Counterseg-mentation mentation StrategyStrategy
A strategy in which a company combines two or
more segments into a single segment to be targeted with
an individually tailored product or promotion
campaign.