Segmentation and the target marketPrinciples of Marketing BUSI 141 | Professor ConradSolomon, M. B., Marshall, G. W., & Stuart, E. W. (2016). Marketing: Real People, Real Choices (8th ed.). Boston: Pearson Education, Inc.
What we will discuss todaySelect and Enter a Market Segmenting the MarketDemographicGeographicPsychographicBehavioral Targeting Positioning
Select & Enter a MarketPages 194 195 Market definedAll customers and potential customersShare a common need satisfied by a specific productThat can make the exchangeResourcesWillingnessAuthorityGoals of the marketer (you!)Create valueBuild customer relationshipsSatisfy needs
Select & Enter a MarketPages 194 195 Mass MarketingCosts lessEliminates need for Separate advertising campaignsDistinctive packagingLeast effective marketing strategyTarget market strategyDivide total market into segments based on consumer characteristicsSelect one or more segmentsDevelop products to meet the needs of specific segments
5Three-Step ProcessPages 194 195
segmentationPages 195 207 The process of dividing a larger market into smaller pieces on one or more meaningful, shared characteristic.
7segmentationPages 195 207
VALS FrameworkBased on three primary consumer motivations:IdealsAchievementsSelf-expressionLearn more about segmentsVALS typesTake the VALS surveySurvey link
LECTURE NOTES:The best known general psychographic segmentation system is named VALS, which stands for values and lifestyles. The VALS system segments U.S. consumers into eight unique groups based on 1) their primary motivation and 2) their level of resources and innovation. Primary motivations include ideals (meaning consumers are motivated by knowledge and principles); achievement (purchases reflect status and achievement to their peers), and self-expression, (purchases reflect a desire for social/physical activity, variety, and risk.According to the VALS website, A person's tendency to consume goods and services extends beyond age, income, and education. Energy, self-confidence, intellectualism, novelty seeking, innovativeness, impulsiveness, leadership, and vanity play a critical role. These psychological traits in conjunction with key demographics determine an individual's resources. Various levels of resources enhance or constrain a person's expression of his or her primary motivation. http://www.strategicbusinessinsights.com/vals/ustypes.shtml#motivation
WEBSITE NOTES:The link shown on the left hand side of Figure 7.3 will open a web page showing an identical figure. To the right of the figure, the instructor may wish to click on each of the links shown, each of which leads to a detailed description of one of the eight VALS segments.The link to the right of Figure 7.3 on this slide launches a gateway page from which visitors can take the VALS survey. It might be beneficial to launch the survey, for the purpose of illustrating to students the type of questions which are used to classify students.
TargetingPages 207 210 Evaluating the attractiveness of each potential segment and deciding in which of these groups you will invest resources to try to turn them into consumers.
TargetingPages 207 210 The result is your Target Audience the segment(s) that becomes the focus of the marketing plan and efforts.
11Three-Step ProcessPages 207 210
Evaluate Market SegmentsPages 207 210 Are customers similar to product needs AND different from customers in other segments?Is segment measurable? Is it worth the effort?Is segment large enough to be profitable?Can you communicate with the segment?Can you serve the needs of the segment?
Develop Segment ProfilesPages 207 210 Do CP Customer ProfilingDescribe the customer (Demographic, psychographic)Locate the customer (Geographic)Define their needs and purchase behaviorConnect with current customers/conduct researchCreate a portrait of the typical customer in the segment
Choose a Targeting StrategyPages 207 210 Undifferentiated targeting strategyDifferentiated targeting strategyConcentrated targeting strategyCustomized marketing strategyMass customization
Developing a marketing strategy to influence how a particular market segment perceives a good/service in comparison to the competition.
15PositioningPages 210 214