chapter 6 market segmentation and the marketing mix: determinants of advertising strategy william f....
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Chapter 6Market Segmentation and the
Marketing Mix: Determinants of Advertising Strategy
William F. Arens Michael F. Weigold Christian ArensMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Charles Finney (1792-1875)
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Chapter Overview
How marketers use behavioral characteristics to cluster perspective customers into market segments
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Chapter Objectives
Define market segmentation and describe its purposes
Explain the target marketing process
Show how IMC is used with the product element in marketing
Review how IMC is used with the place element in marketing
Discuss how IMC is used with the communication element in marketing
Illustrate how IMC is used with the price element in marketing
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Old Spice/W+K
Isaiah Mustafa – ShowerIsaiah Mustafa – Scent New Old Spice Guy FabioTerry Crews
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The Market Segmentation Process
1. Identify people with shared needs and characteristics
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The Market Segmentation Process
2. Aggregate these groups into market segments according to their mutual interest in the product’s utility
1. Identify people with shared needs and characteristics
Q. 1. Define Market Segmentation.
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The Market Segmentation Process
2. Aggregate these groups into market segments according to their mutual interest in the product’s utility
1. The division of the market into homogenous groups
Demographic
Behavioristic
Geographic
Psychographic
Shared Characteristics Categories
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Segmenting Consumer Markets
Q. 2. What are the four bases for segmenting markets?
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Behavioristic Segmentation
Sole UsersSemi-Sole UsersDiscount UsersAware Non-triersTrial/RejectorsRepertoire Users
User-Status
Purchase-Occasion
BenefitSegmentation
Benefits-Sought
Volume Segmentation
Usage-Rate
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Market Segmentation
User status: Mammut ad targets its repertoire users who are concerned with quality
Insert photo 6.4, p. 171
Mammut ad
Position = 2.9“ horizontal, 1.5“ vertical
Size = 5.7” WIDE
Resolution = 300 dpi
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Market Segmentation
Purchase occasion: Columbia seasonal gear ad
Insert photo 6.5, p. 172
Columbia sportswear ad
Position = 2.9“ horizontal, 1.5“ vertical
Size = 5.7” WIDE
Resolution = 300 dpi
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Geographic Segmentation
Sales are analyzed by: Region Country size City size Zip code Types of stores
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Demographic Segmentation
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Demographic Segmentation
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Psychographic Segmentation
Values
AttitudesPersonality
Lifestyles
Feelings
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Market Segmentation
Adidas captures
attitude and lifestyle
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Target Market Selection
Harley-Davidson ad appeals to likely customers who want to stand out in the ordinary
Insert photo 6.10, p. 186
Harley-Davidson ad
Position = 2.9” horizontal, 1.5” vertical
Size =5.7” WIDE
Resolution = 300 dpi
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Psychographic Segmentation
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Psychographic Segmentation
10 values shared by
people around
the world
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Psychographic Segmentation
MindBase finds shared patterns of behavior
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Segmentation Profile
Our customer is: Male who lives in the East In an urban city of 1 million people Young, married (ages 35-49) with a child Annual income between $50,000 - $100,000 Is a college graduate who is a professional Is white, upper lower class, ambitious Sports minded and brand conscious
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Business, Government, & Industry
Differencesfrom Consumer
Markets
Professional buyers
Many purchase decision factors
Categorized byNAICS code
Small number of buyers
Concentratedgeographically
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Business, Government, & Industry
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Market Concentration
Note the importance of
the Midwest and California
to manufacturin
g marketing
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Aggregating Market Segments
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Defining the Target Market
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The Target Marketing Process
2. Use the 4Ps of the marketing mix to shape a product concept for the market
1. Select a target market from the market segments identified
Product Price PlacePromotion
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Target Market Segments
New EmptyNest
YoungInfluentials
Park BenchSeniors
NewBeginnings
Home SweetHome
Movers &Shakers
BohemianMix
Q. 3. Define Product Concept.
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Product Concept
Consumer’s perception of a product as a bundle of utilitarian and symbolic values
that satisfy functional, social, psychological, and other wants and needs.
Q. 4. Explain the relationship between advertising and the
Product element of the marketing mix.
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Product Life Cycles
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The Product Element
Market
Tangibility
Consumption rate
Buying habits
Physical description
Classification by…
Own a word
Market segment appeal
Benefits offered
Positioning
Classification
Differentiation
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The Product Element
Volvo positions itself as owning safety
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The Product Element
Perceptible
Induced
Hidden
Differentiation
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Product Branding
Individual Family National Private Licensed
Words
ProductName
Design
Symbols
Goal is brand loyalty
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Insert ex. 6.14, p. 193
World’s most valuable brands
Position = 2.9” horizontal, 1.5” vertical
Size = 5.7” WIDE
Resolution = 300 dpi
The Product Element
World’s most valuable brands
http://www.businessweek.com/magazine/toc/06_32/B399606globalbrands.htm
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The Most Valuable Brands
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Product Packaging
Containment,protection,
convenience
Identification
Economy
Consumerappeal
These functions may become copy points
Q. 5. Explain the relationship between advertising and the Price
element of the marketing mix.
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The Price Element
Demand
Production &distribution costs
Competition
Corporate goals & strategies
Price Factors:
Variable influences
Q. 6. Explain the relationship between advertising and the Place
element of the marketing mix.
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The Place (Distribution) Element
Intensive
Exclusive
Selective
IndirectDirect
Network
Buyer Club
Vertical
Franchises
Q. 7. Explain the relationship between advertising and the
Promotion element of the marketing mix.
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The Promotion Element
CollateralMaterials
SalesPromotion
ProductAdvertising
CommunicationMix
PersonalSelling
PublicRelations
DirectMarketing
