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Consumer Behavior,Ninth Edition
Schiffman & Kanuk
Chapter 3Market 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 2Target Market and Marketing Mix Selection
Phase 3
Product/Brand Positioning
Phase 1Market 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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Discussion Question
• Considering the largest bank in your college’s 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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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 BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESGeographic 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 statusSexAge Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Male, femaleSingle, 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, blue-collar, white-collar, agricultural, military
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Table 3.1, continuedSEGMENTATION BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESPsychological 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, couch potatoes, 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 BASESEGMENTATION BASE SELECTED SEGMENTATION VARIABLESSELECTED SEGMENTATION VARIABLESUse-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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Web sites for SinglesLooking for a Match
Match.com targets all singles
The Right Stuff targets only Ivy
League graduates
weblink weblink
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Psychological Segmentation
• Motivations
• Personality
• Perceptions
• Learning
• AttitudesHarley-Davidson Video
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Two High-End Watches for Different Psychological Segments
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Psychographic Segmentation
• Also known as Lifestyle Analysis
• Psychographic variables include attitudes, interests, and opinions(AIOs)
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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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weblink
Opinions and Attitudes
ADBUSTERS Web site is targeted to consumers
with a certain attitude toward
advertisers
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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.
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Discussion Questions
• What types of marketers might segment according to social class?
• What ethical issues might marketers have when marketing to different social classes?
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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 UsageTable 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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Hybrid Segmentation Approaches
• Psychographic-Demographic Profiles
• Geodemographic Segmentation
• SRI Consulting’s VALS
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Selected Demographic Profile of USA Today Excerpt from Table 3-10
USA TODAY USA TODAY.COM
USA TODAY NETWORK
Men 66% 70% 66%
Women 34% 30% 34%
Age 18-49 62% 73% 64%
Age 25-54 65% 78% 67%
Age 55+ 27% 18% 25%
Average Age 45 43 45
Attended college or beyond
77% 83% 77%
College graduate or beyond
55% 65% 56%
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Selected Lifestyle Profile of USA Today Excerpt from Table 3-11
% Comp
Index
Tech Savvy Readers
Use Internet more than once a day 32% 174
Internet access at home 79% 128
Online purchase for business or personal use in past 30 days
40% 182
Household owns a PC 84% 119
Owns digital camera 22% 130
Leisure Activities
Attended movies in last 6 months 73% 120
Bought music CD/tapes in last 12 months 46% 126
Book reading 45% 120
Entertain friends or relatives at home in last 12 months 48% 123
Household subscribes to cable 69% 112
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VALS Framework Figure 3-7
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Discussion Question
• How would you classify yourself according to VALS? Your parents?
• Do you think this represents you as a consumer?
• If so, for what products does this fit you as a consumer?
• Copy down the URL below to take the VALS survey tonight. See if you were right in your classification…http://www.sric-bi.com/VALS/presurvey.shtml
weblink
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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 mizes