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Clinton vs Dole: The Politics of Segmentation

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Levels of Market Segmentation

Mass Marketing (Shotgun Approach)• Model T

• Increasing Competition, • Improved production techniques• Fragmentation of markets

Segment Marketing

• Information revolution• Flex and JIT Manufacturing• Credit-technology

Individual Marketing (Rifle Approach)• Segments of “one”• Information technology and addressability• National Bicycle, McGraw Hill

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Definition

Segmentation is the process of dividing the market into groups based upon important consumer characteristics.

Why Segment?

What is relevant? What properties should segments have?

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Why Segment?

Better focus on customer needs

Promotes new product ideas (Dockers, Levis 505 and 900)

Helps develop effective marketing mix strategy (Dockers --men 25-45 reminiscing baby boomers, retail merchandising)

Allocation of marketing resources to different products depending upon segment attractiveness.

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Properties

With-in group homogeneity but heterogeneity across groups.

Accessibility

Segment is such that the company can best serve them vis-vis competition. (Gerber’s and pre-school kids food).

Economic viability

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Bases for Segmentation

Geographic Regionalizing to accommodate local tastes (Maxwell House

stronger flavored in the west).

Demographic: What consumer characteristics are? (Age, Gender, Income…)

Psychographics: Why do consumers buy?

» Lifestyle: Hathaway» Personality Pillsbury Doughboy» Social Class

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Bases for Segmentation

Behavioral Usage occasions

» Kodak single-use cameras from underwater use to baby pictures Usage Rates

» 80-20 rule, eg., beer drinkers. Loyalty Status

» Hard-core loyals: A A A A A A » Switchers: A B E A D B » Variety Seekers A B C B A C B

Benefit Segmentation

How do you implement psychographic and behavioral segmentation e.g., for media buying» key role of demographics

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Product Positioning

Positioning = Segmentation + Differentiation Slotting your product in the consumer’s mind.

» Who am I? Why buy me?

“Positioning starts with the product….But Positioning is not what you do to the product. Positioning is what you do to the mind of the prospect” - Ries and Trout

The Positioning Statement:

“Product/Brand is» unique and most important claim

» among all (competitive frame)» because (support)

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Positioning Strategies

Against competition» 7Up the Uncola, Wendy’s Where is the Beef?

Position with the competition » Exclusive Club Strategy, e.g., the Big Three for followers

Grab an Unoccupied Position

Using your endowment» Number One Position