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CHAPTER

THREE
Market
Segmentation
and Strategic
Targeting
Learning Objectives

1. To Understand Why Market


Segmentation Is Essential.
2. To Understand the Criteria for
Targeting Selected Segments
Effectively.
3. To Understand the Bases for
Segmenting Consumers.
4. To Understand How Segmentation
and Strategic Targeting Are Carried
Out.
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Chapter Three
Slide
What Kind of
Consumer Does This Ad
Target?

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Slide
This Ad Targets Runners Who Are
Physically Active People and Also
Relish the Outdoors.

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Slide
Why Segmentation is
Necessary
Consumer needs
differs
Differentiation
helps products
compete
Segmentation
helps identify
media

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Slide
Positioning
The value
proposition,
expressed
through
promotion,
stating the
products or
services capacity
to deliver specific
benefits.

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Slide
Criteria for Effective
Targeting
Identifia
Sizeable
ble

Accessi
Stable
ble
Congruent with
the companys
objectives and
resources
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Slide
Which Distinct Benefit Does
Each of the Two Brands Shown
in This Figure Deliver?

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Slide
The Dentyne Ads Benefit is Fresh
Breath and the Nicorette Ad is
Whitening and Smoking Cessation

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Slide
Bases for Segmentation

Representing core attributes of a


group of existing or potential
customers.
Hybrid segmentation
Bases for Segmentation

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Slide
Discussion Questions

Considering the largest bank in your


colleges city or town:
How might consumers needs differ?
What types of products might meet their
needs?
What advertising media makes sense for
the different segments of consumers?

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Slide
Consumer-Rooted Segmentation
Bases

Demographics
Geodemograph
ic
Personality
Traits

Lifestyles

Sociocultural

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Slide
Write and discuss

Why demographic segmentation is


said to be core of all segmentation?
Demographic Segmentation

Age Gender

Marital Family Life-


Status cycle

Income,
Education,
and
Occupation

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Slide
Geodemographic
Segmentation
Based on geography and
demographics
People who live close to one another
are similar
Birds of a feather flock together

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Slide
Discussion

In which of the following product


categories geographic segmentation
plays important role
Skin cleansers
Detergents
Clothing
Biscuits
Personality Traits

People often do not identify these


traits because they are guarded or
not consciously recognized
Consumer innovators
Open minded
Perceive less risk in trying new things

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Slide
Lifestyles

Psychographics
Includes
activities,
interests, and
opinions
They explain
buyers purchase
decisions and
choices
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Slide
Discussion Questions

How might you differ from a person


with similar demographics to
yourself?
How would this be important for
marketers?

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Slide
Two Views of Post-Retirement
Lifestyle
Table 3.6 (excerpt)
AS AN OPPORTUNITY TO MAKE A NEW START
This group regards retirement as an exciting time. Work
will have been largely unrewarding, so the transition is
seen as a freedom from the constraints of their former role.
Retirement will invigorate such people and inspire them
toward undertaking activities that work largely prevented
ASthem from pursuing.
A CONTINUATION OF THEIR PRE-RETIREMENT
LIFESTYLE
To such people, retirement is not perceived as signaling a
drastic change. Work life has not been as unsatisfying as
for others, hence its ending is not greeted with euphoria.
There is, however, some satisfaction that retirement
permits more opportunity to devote time to existing
activities outside of their working role. The future
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is likely
Chapter Three
to see an increase in such activities but no real 23
desire to
Slide
VALS Figure 3.4

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Slide
Socio-Cultural Values and
Beliefs
Sociological = group
Anthropological = cultural
Include segments based on
Cultural values
Sub-cultural membership
Cross-cultural affiliations

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Slide
Consumption-Specific
Segmentation Bases
Usage rate

Usage situation

Benefit
segmentation
Perceived brand
loyalty

Brand relationship

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Slide
Consumption-Specific
Segmentation
Usage-Behavior
Usage rate
Awareness status
Level of involvement

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Consumption-Specific
Segmentation
Usage-Behavior
Usage-situation segmentation
Segmenting on the basis of special
occasions or situations
Example : When Im away on business, I
try to stay at a suites hotel.

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Slide
Which Consumption-
Related Segmentation Is
Featured in This Ad?

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Slide
This is an Example of a
Situational Special Usage
Segmentation.

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Benefits Segmentation

Benefits sought represent consumer


needs
Important for positioning
Benefits of media

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Benefits from visiting
dentist, hairdresser, and
travel agent
Benefits Visiting Tourists
Seek in National Park
Table 3.13 (excerpt)
Segment Description
Environmentalists Interested in an unpolluted, un-spoilt natural
environment
and in conservation. Not interested in socializing,
entertainment, or sports. Desire authenticity
and less man-made structures and vehicles
in the park.
Want-it-all Value socializing and entertainment more than
Tourists conservation. Interested in more activities and
opportunities for meeting other tourists. Do not
mind the urbanization of some park sections.

Independent Looking for calm and unpolluted environment,


Tourists exploring the park by themselves, and staying at
a comfortable place to relax. Influenced by word
of mouth in choosing travel destinations.
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Slide
Media Benefit
Digital Newspaper
Immediacy
Accessibility
Free of cost Traditional
newspaper
Writing style
Depth
Detail
Brand Loyalty and
Relationships
Brand loyalty includes:
Behavior
Attitude
Frequency award programs are popular
Customer relationships can be active or passive
Retail customers seek:
Personal connections vs. functional features
Banking customers seek:
Special treatment
Confidence benefits
Social benefits

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Slide
Implementing Segmentation
Strategies

Micro- and behavioral targeting


Personalized advertising messages
Narrowcasting
Email
Mobile
Use of many data sources

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Slide
Implementing Segmentation
Strategies
Concentrated Marketing
One segment
Differentiated
Several segments with individual
marketing mixes
Countersegmentation

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photocopying, recording, or otherwise, without the prior
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States of America.

Copyright 2010 Pearson Education, Inc.


Publishing as Prentice Hall
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