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Schiffman & Kanuk Chapter 3 Market Segmentation Consumer Behavior, Ninth Edition

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Chapter Outline

• What Is Market Segmentation?

• Bases for Segmentation

• Criteria for Effective Targeting of

Segments

• Implementing Segmentation Strategies

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Market Segmentation

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.

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Three Phases of Marketing

Strategy

Phase 2

Target Market and Marketing Mix Selection

Phase 3

Product/Brand Positioning

Phase 1

Market Segmentation

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Segmentation Studies

• Discover the needs and wants of

groups of consumers to develop

specialized products to satisfy group

needs

• Used to identify the most appropriate

media for advertising

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Ryka produces

sneakers that

meet the special

needs of

women’s feet.

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Bases for Segmentation

• Geographic

• Demographic

• Psychological

• Psychographic

• Sociocultural

• Use-Related

• Usage-Situation

• Benefit Sought

• Hybrid

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Table 3.1 Market Segmentation

Occupation

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Geographic 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 status

Sex

Age Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+

Male, female

Single, married, divorced, living together, widowed

Under $25,000, $25,000-$34,999, $35,000-$49,999,

$50,000-$74,999, $75,000-$99,999, $100,000 and over

Education Some high school, high school graduate, some college,

college graduate, postgraduate

Professional, agricultural, military

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Table 3.1, continuedSEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Psychological Segmentation

Learning-involvement

Perception

Personality

Needs-motivation Shelter, safety, security, affection, sense of self-worth

Extroverts, novelty seeker, aggressives, innovators

Low-risk, moderate-risk, high-risk

Low-involvement, high-involvement

Psychographic

Subcultures (Race/ethnic)

Religion

Cultures

(Lifestyle) Segmentation Economy-minded, 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

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SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Use-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, peers

Benefit Segmentation Convenience, social acceptance, long lasting, economy,

value-for-the-money

PRIZM NE

Geodemographics

“Movers & Shakers,” “New Empty Nests,” “Boomtown

Singles,” “Bedrock America”

Demographic/

Psychographics

Combination of demographic and psychographic profiles

of consumer segments profiles

SRI VALSTM Innovators, Thinkers, Believer, Achievers, Strivers,

Experiencer, Makers, Survivors

Hybrid Segmentation

Table 3.1, continued

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Geographic Segmentation

The division of a total potential

market into smaller subgroups on

the basis of geographic variables

(e.g., region, state, or city)

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Demographic Segmentation

• Age

• Sex

• Marital Status

• Income, Education, and Occupation

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Psychological Segmentation

• Motivations

• Personality

• Perceptions

• Learning

• Attitudes

3 - 14www.freeuniversitybd.weebly.comCopyright 2007 by Prentice Hall

Two High-End Watches for Different

Psychological Segments

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Psychographic Segmentation

• Also known as Lifestyle Analysis

• Psychographic variables include,

Activities, interests, and opinions

(AIOs)

• Activities ( Consumer or family spend

time)

• Interest: Preference

• Opinion: feeling

3 - 16www.freeuniversitybd.weebly.comCopyright 2007 by Prentice Hall

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.

[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

Table 3.6 Excerpts from AIO Inventory

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Sociocultural Segmentation

• Family Life Cycle

• Social Class

• Culture, Subculture, and Cross-Culture

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Family Life Cycle Advertising

Video cameras

are often

purchased by

young couples

with children.

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Target reaches

out to the

Latino

market.

3 - 20www.freeuniversitybd.weebly.comCopyright 2007 by Prentice Hall

Use-Related Segmentation

• Rate of Usage

– Heavy vs. Light

• Awareness Status

– Aware vs. Unaware

• Brand Loyalty

– Brand Loyal vs. Brand Switchers

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High

Low

Consumption

High Low

LoLows

(starve)

HiHighs

(stroke)

LowHighs

(chase)

HiLows

(tickle)

Segmenting Customers by Usage

Table 3-8

Current Share

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Usage-Situation Segmentation

• Segmenting on the basis of special

occasions or situations

• Example Statements:

– Whenever our daughter Jamie gets a raise,

we always take her out to dinner.

– When I’m away on business, I try to stay at

a suites hotel.

– I always buy my wife flowers on

Valentine’s Day.

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Benefit Segmentation

Segmenting on the basis of the most

important and meaningful benefit

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Band-aid

offers “flex”

as a

benefit to

consumers.

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Criteria for Effective Targeting of

Market Segments

• Identification

• Sufficiency

• Stability

• Accessibility

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Implementing Segmentation

Strategies

• Concentrated Marketing

– One segment

• Differentiated

– Several segments with individual

marketing mixes