Market segmentation l.jpg
This presentation is the property of its rightful owner.
Sponsored Links
1 / 50

Market Segmentation PowerPoint PPT Presentation


  • 1414 Views
  • Uploaded on
  • Presentation posted in: Music / Video

Market Segmentation. Consider. the role of segmentation in marketing strategy types of market segmentation in consumer markets B2C industrial B2B criteria & bases for segmenting consumer markets. the segmentation process & basic strategies positioning & repositioning

Download Presentation

Market Segmentation

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Market segmentation l.jpg

Market Segmentation


Consider l.jpg

Consider

  • the role of segmentation in marketing strategy

  • types of market segmentation in

    • consumer markets B2C

    • industrial B2B

  • criteria & bases for segmenting consumer markets.

  • the segmentation process & basic strategies

  • positioning & repositioning

  • factors behind segmentation strategy choices.


Overview l.jpg

Overview

  • discover needs/wants of consumer groups to develop specialised products to satisfy group needs

  • identify the best media for advertising

  • related concepts (STP)

    • Segmentation (subsets with similar needs)

    • Targeting (which segment to aim for)

    • Positioning (the product in the mind of the customer)


Target market analysis l.jpg

Target Market Analysis

  • What market segments are we choosing to serve

  • Why?

  • How are these segments evolving?

  • What new segments are emerging?

  • Mass marketing?

    • econ of scale

  • Micromarketing

    • clear segment

    • a Niche

    • a Locality

    • an Individual


Concentrated niche micro marketing l.jpg

Concentrated (niche) & micro-marketing

Niche

  • commit all marketing resources to serve a single market segment

  • Attractive to small firms with limited resources and to firms offering highly specialized goods and services

    Micro-marketing

  • target potential customers at a very basic level, such as by ZIP code, specific occupation, lifestyle, or individual household

  • WWW & Internet makes micromarketing more effective


Trainers that meet the special needs of women and their feet l.jpg

Trainers that meet the special needs of women and their feet.


Market aggregation l.jpg

Market Aggregation

  • No segmentation

  • heterogenous customers

  • homogenous product

  • no differentiation

The market


Segmentation l.jpg

Segmentation

  • Segments must be

  • Identifiable

  • Measurable

  • Accessible, reachable

  • Substantial enough

  • Unique enough

  • Durable/stable

...based

on customer-based

characteristics or

product attributes

S-1

Good market segmentation

  • has internally homogenous members and

  • is externally heterogeneous

S-3

S-2


Targeting l.jpg

Targeting

Choice criteria?

  • Focus on segment(s)

  • providing most value

  • Pareto Principle

  • the 20% who

  • provide 80% of

  • sales value

  • Group e.g. by

  • age

  • sex

  • income

  • lifestyle

S-1

S-3

S-2


Value segmentation pareto illustrations l.jpg

Value segmentation – Pareto - illustrations

The 80/20 rule

Revenue/Profits

Loyal

80%

20%

Brand User

20%

20%

Semi-Loyal

Switchers

CompetitiveBrand User

40%

Non User ofCategory

.

20%

Source: Garth Hallberg


Tasks in strategic marketing plans l.jpg

Tasks in Strategic Marketing Plans

  • Before implementing a marketing mix strategy (7Ps), identify, evaluate & select a target market.

    • Who has the purchasing power, authority & willingness to buy?

    • What specific consumer segment is most likely to buy the product?

  • Now target the market, design a programme to fit, implement it


Positioning l.jpg

Positioning

Low Price

premium

B

convenient

Consistent quality

C

Not accessible

A

accessible

Brand conscious

D


Positioning13 l.jpg

Positioning

  • shaping the product & developing a marketing programme so that product is perceived to be (and is) different from competitors’ products.

  • Positioning map: to show differences in consumers’ perceptions of competing products

  • Reposition: marketing strategy to change a product’s position in consumers’ minds relative to positions of rival product


B2c and b2b goods l.jpg

B2C and B2B Goods

  • identify the purchaser + reasons for buying the goods

  • Consumer goods (B2C)

    • products & services bought by the end consumer for personal use.

  • Business goods (B2B)

    • Products/services bought to be used, directly or indirectly, to produce or supply other goods/services or for resale e.g. 5 litre tomato sauce containers for food service operators


Bases for market segmentation l.jpg

Bases for Market Segmentation

  • Psychographic Segmentation

  • Activities

  • Interests

  • Opinions, Attitudes & Values

  • (AIO) surveys for measuring lifestyle. Lifestyles

  • Personality

  • Self-image

Demographic

Gender

Age

Family life cycle

Race/Ethnic group

Social class

Education

Income

Occupation

Family size

Religion

Home ownership

Potential

Markets

  • Behavioural

    actual behavior toward product itself. A good starting point for segmentation

  • Benefits sought

  • Usage rate

  • Brand loyalty

  • User status: potential, 1st-time, regular etc.

  • Readiness to buy

  • Occasions: holidays & events that stimulate purchases

Geographicn

Country

Region

Urban/Suburban/Rural

Population density

City size

Climate

Geo-Demographic – Ethnic .. "birds of a feather flock together"


Decisions affected by segmentation choices l.jpg

Basis

Geographic

Demographic

Psychographic

Benefit

Product Usage Rates

Decisions

sales region

Sales force location

Retail location

Estimate segment size

local distribution channels or catering to different age, income & education groups

Product/service positioning

Advertising themes

Sales training

Product/service design--different models + different features

Advertising themes

Sales training

Special products (sizes and quality) or services

Frequent-user promotions

Special financial terms

Decisions Affected by Segmentation Choices

divides U.S. consumer into 14 groups & 66 segments.

Urban Uptown

Midtown Mix

Urban Cores

Elite Suburbs

The Affluentials

Middleburbs

Inner Suburbs

2nd City Society

City Centers

Micro-City Blues

Landed Gentry

Country Comfort

Middle America

Rustic Living


Main inhabited areas in canada l.jpg

Main Inhabited Areas in Canada

Geographic segmentation - Canada

  • Dividing overall market into homogeneous groups by location

  • Can identify general patterns but not all consumers in a location will make the same buying decision.

  • Major brands get 40-80% of sales from core regions

  • Climate is a segmentation factor e.g.

    • Northerners eat more soup than Southerners

    • Southerners use more swimming pool chemicals than Northerners


Distribution of canadian population by province l.jpg

% Distribution of Canadian Population by Province

2001


Provincial and territorial populations 1981 1991 2001 l.jpg

Provincial and Territorial Populations, 1981, 1991, 2001

POPULATION (THOUSANDS)

Region

1981

1991

2001

Newfoundland

568

568

513

Prince Edward Island

123

130

135

Nova Scotia

847

900

908

New Brunswick

696

724

729

Quebec

6 438

6 896

7 237

Ontario

8 625

10 085

11 410

Manitoba

1 026

1 092

1 120

Saskatchewan

968

989

979

Alberta

2 238

2 546

2 975

British Columbia

2 744

3 282

3 908

Yukon

23

28

29

Northwest Territories

46

36

37

Nunavut

n/a

21

27

Canada

24 343

27 297

30 007

Source: Statistics Canada Website http://geodepot.ca/English/Pgdb/People/Population/demo05.htm.


Urban rural population distribution 1871 2001 l.jpg

Urban - Rural Population Distribution, 1871-2001


Canada s 25 largest metropolitan areas l.jpg

Canada's 25 Largest Metropolitan Areas

Area

2001 Population (Thousands)

1996 Population (Thousands)

4445

3359

1891

1031

852

392

698

677

650

416

403

390

347

313

292

281

222

199

178

167

166

150

144

129

131

4881

3512

2079

1107

972

935

693

685

681

426

432

393

359

319

314

305

231

198

176

159

157

155

142

128

125

Toronto

Montreal

Vancouver

Ottawa-Hull

Calgary

Edmonton

Quebec

Winnipeg

Hamilton

London

Kitchener

St. Catharines-Niagara

Halifax

Victoria

Windsor

Oshawa

Saskatoon

Regina

St. John’s

Chicoutimi-Jonquière

Sudbury

Sherbrooke

Trois-Rivières

Saint John

Thunder Bay

Source: http:www.statcan.ca/english/Pgdb/People/Population/demo05.htm


Population projections by age group l.jpg

Population Projections by Age Group

Demographic segmentation: dividing consumer groups by e.g. sex, age, income, occupation, education, household size & stage in family life cycle


Family life cycle l.jpg

Family Life Cycle

  • young singles

  • young married

  • couples who remain childless,

  • single parenthood

  • parenthood (full nest)

  • post-parenthood (empty nest)

  • dissolution (separated, widowed, or divorced)

  • retirees with children still at home

  • able elderly


Buying patterns for different age groups l.jpg

Buying Patterns for Different Age Groups

AgeName of Age Group Merchandise bought

0 - 5 Young childrenBaby food, toys, nursery, furniture, children’s wear

6 - 19School childrenClothing, sports equipment, records, (including teenagers)school supplies, food, cosmetics, used cars

20 - 34Young adultsCars, furniture, houses, clothing,

recreational equipment, purchases for younger age groups.

35 - 49Younger middle-agedLarger homes, better cars, second

adultscars, new furniture, recreational equipment

50 - 64Older middle-aged Recreational items, presents for adultsyoung marrieds & infants

65+Senior adultsMedical services, travel, medicines, purchases for younger age groups


Segmenting by age l.jpg

Segmenting by age

  • many firms identify market segments by age

  • design products to meet specific needs of certain age groups e.g.

    • baby food, toothpaste, fashion garments, walking aids

  • sociologists attribute different consumer needs & wants across age groups to a cohort effect

  • tendency among members of a generation to be influenced & drawn together by significant events occurring in formative years e.g. age 17-22


Demographic the grey market l.jpg

Demographic: The Grey Market

  • 40% of UK income, 70-80% of wealth

  • UK population split

    • 16% 50-64 years old

    • 16% 64 +

  • Grey market wealth

    • 20% well off (twice average income)

    • 40% property-rich; income poor

    • 40% poor

      • 1% in UK (15% in US) on incomes 40% lower than national average income

  • Grey market lifestyle groups WOOPIES (Well off older persons)

    • married in two person households, <75yrs, well off, 86% Investment income

    • high home & car ownership

  • OPALS (Old people with affluent lifestyles)

  • JOLLIES - Jet-setting oldies with lots of loot


Ethnic group segmentation l.jpg

Ethnic Group Segmentation

  • USA Census Bureau

    • by 2050, nearly 50% of US population will belong to nonwhite minority groups

    • three largest & fastest-growing racial/ethnic groups African Americans, Hispanics, Asian Americans.


Generalisation l.jpg

Generalisation

… based on studying the impact of household income changes on consumer spending behaviour

As family income increases

1. a smaller % goes on food

2. the % spend on housing & household operations & clothing stays constant

3. % spend on other items (such as recreation & education) increases


Percentage annual expenditures by income groups 1999 l.jpg

Percentage Annual Expenditures by Income Groups, 1999


Psychographic segmentation lifestyles l.jpg

Psychographic Segmentation - Lifestyles

  • decisions about how to live

  • family, job, social & consumer activities

  • Lifestyles  values & demographics

  • AIO surveys: Activities, Interests, Opinions

  • Why?

    • richer descriptions of potential target markets

    • behavioural profiles to target promotions, price etc

    • detail to match company’s image & offerings with types of consumers likely to buy

  • develop population psychographic profiles using survey instruments – see VALS - “Values and Lifestyles”

  • UK Households 23 million

  • Young NK 29.7%

    • Most affluent 4.8%

    • Mid-high affluent 11.2%

      • Farm & 4x4

      • Future families

      • Rising stars

      • MOR

      • Urbans

      • Trendy upstarts

    • Mid-low affluent 6.3%

    • Least affluent 7.4%

      • High rise hopefuls

      • Hard choices

      • Beer & crisps

      • Hand-to-mouth

  • Families 29.7%

  • Empty nesters 21.1%

  • Retired seniors 19.5%


Geo demographics lifestyle and postcodes l.jpg

Geo-demographics: Lifestyle and postcodes

  • Thriving e.g. 20% of population

    • wealthy achievers (suburbs), affluent greys (rural); prosperous pensioners (retirement areas)

  • Expanding - 12%

    • affluent execs - families

  • Rising - 8%

    • affluent urbanites, better off execs in inner cities

  • Settling - 24%

    • comfortable middle-agers in suburbia

  • Aspiring 14%

    • new home owners

  • Striving (struggling?) 23%

    • older people in less prosperous areas; council estates


Lifestyle vals l.jpg

Lifestyle-VALS

  • Values and Lifestyles (1978)

  • based on the idea that

    • social class, although significant, does not determine all of our values.

    • there are important value differences within a class

      • Fulfilled’s, Achievers, Experiencers all have the same level of resources. Why are they different?

      • see http://www.sric-bi.com/VALS/


Vals tm network l.jpg

VALSTMNetwork

Source: SRI Consulting Business Intelligence http://www.sric-bi.com/VALS/presurvey.shtml


High end watches for which life style segments l.jpg

High-end watches for which life-style segments?


Other lifestyle descriptors mccann erickson men l.jpg

Other lifestyle descriptors: McCann-Erickson Men

  • Avant Guardians

    • concerned with well-being of others rather than possessions. Well educated, self-righteous.

  • Pontificators

    • strongly held, traditional opinions. Very British and concerned with keeping others on the right path.

  • Chameleons

    • want to be contemporary to win approval. Copiers not leaders.

  • Self-Admirers

    • High self-image, young, intolerant of others, motivated by success.

  • Self-Exploiters

    • the “doers” and “self-starters”, competitive, pressured, pessimistic

  • Token Triers

    • always willing to improve their luck, but tend to try and fail.

  • Sleepwalkers

    • actively opt out, contented under achievers.


Behaviour product related segmentation l.jpg

Behaviour/product-related segmentation

  • segmentation according to the different benefits that consumers seek from the product

  • focus on ‘why’ a customer purchases rather than ‘what’

  • Benefits that we seek when we buy

    • attributes we seek in a good or service

    • benefits we expect to receive from that good or service

  • Usage rates for a product e.g.

    • heavy-, moderate-, light-user segments

  • 80/20 principle (“Pareto’s Law”) 80% of a product’s revenues comes from a relative small, loyal % of total customers

  • Consumer brand loyalty toward product e.g. AirMiles, ClubCard points


Slide37 l.jpg

Band-Aid offers “flex” as a

benefit to consumers.


Benefit segmentation applied to yogurt l.jpg

Individually packaged

With

fruit

High-

priced

Mild

Organic

Contains

bio-bifidus

Low

fat

Low-

priced

BENEFITS SOUGHT FROM YOGURT

Provides choice

for family membersX X

Convenient to useX

Tastes good XX

Good quality X XXX

Healthy XXXX

Helps digestionX

Helps dietX

Spend less moneyX

Benefit Segmentation Applied to Yogurt

Attributes of Yogurt

Source: Adapted from Marco Vriens and Ter Hofseted, “Linking Attributes, Benefits, and Consumer Values,” Marketing Research,

Chicago, Fall 2000, V. 12(3) pp. 4-10. Reprinted with permission by the American Marketing Association.


Other segmentation categories l.jpg

Other segmentation categories

  • Buyer-readiness segmentation:

    • ignorance, awareness, knowledge, preference and conviction

  • Interaction segmentation:

    • different channels, payment methods, promotions & communications

  • Occasion segmentation:

    • time of day, festivals, births, marriages, deaths etc.

    • examples:

      • 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.

  • Internet usage


Market matching strategies 1 of 2 l.jpg

Market Matching Strategies (1 of 2)

1908Early 2000s1955Early 2000

MarketSingle-OfferMulti-OfferSingle-OfferMulti-Offer

SegmentStrategyStrategyStrategyStrategy

General-Purpose Cars

SmallModel TFocusBeetlePolo

MediumModel TTaurusGolf

LargeCrown VictoriaPassat

Sporty Cars

Low-PricedZX2 Escortnew Beetle

GTI

Medium-PricedCougarCabrio

MustangAudi TT

Boxster

High-pricedJaguar XK8Porsche

Aston Martin DB7911

PRODUCT OFFERINGS

Ford Motor Company Audio/Volkswagen/Porsche


Market matching strategies 2 of 2 l.jpg

Market Matching Strategies (2 of 2)

1908Early 2000s1955Early 2000s

MarketSingle-OfferMulti-OfferSingle-OfferMulti-Offer

SegmentStrategyStrategyStrategyStrategy

Luxury Cars

Medium-pricedLincoln ContinentalAudi A4

Lincoln Town Car

High-pricedJaguar S-TypeAudi A6Audi A8

VansWindstarEuroVan

Econoline

Trucks

SmallModel T (Truck)Ford Ranger

MediumFord “F” series

Sport Utility VehiclesExplorer

(SUVs)Expedition

Excursion

Lincoln Navigator

Ford Motor Company Audio/Volkswagen/Porsche


Segmentation for industrial markets l.jpg

Product

Segmentation

Geographic

Segmentation

Potential

Industrial

Markets

End-Use

Application

Segmentation

Account Size

and Potential

Segmentation

Segmentation for Industrial Markets

  • Organizational Demographics

    • industry size, location, company age

  • Operating Variables

    • Technology, process

  • Purchasing Approach

    • Organization & DMU structure

  • Situational Variables

    • Order size, routine vs. customized, urgency of order

  • Personal Characteristics of Buyers

    • attitude to risk, champions


Radio broadcast segmentation l.jpg

Radio Broadcast segmentation

The Total Market for Radio

This matrix is too simple.

How would we classify today?

The Market Segment for Radio by Age & Benefit

Age

Benefit

Teens

Young

Adult

Middle

Adults

Senior

Information

Entertainment

Companionship


Hypothetical middle adult segment for radio l.jpg

Middle Adults

Early

Retiree

Professional

Hourly

Employee

Business

Owner

Information

X

X

X

Entertainment

X

X

Desired Benefit

Companionship

X

Hypothetical Middle Adult Segment for Radio


Hypothetical middle adult segment for information radio l.jpg

Hypothetical Middle Adult Segment for Information Radio

Middle Adults

Early

Retiree

Professional

Hourly

Employee

Business

Owner

Breaking news

X

X

Political

commentary

X

X

Financial market

commentary

X

X

X

Desired Information Focus

Advice

X

X

Weather

X

X

Call-in

X

Gossip

X


Hypothetical positioning map cbc versus commercial radio l.jpg

Hypothetical Positioning Map: CBC versus Commercial Radio

Entertaining

Commercial

Talk Radio

Commercial

Talk Radio

*As it Happens

*This Morning

CBC local*

After Hours*

Informational

Music

*CBC News

Disc Drive*

Take 5*

*Ideas

Challenging


Positioning of soap l.jpg

Positioning of Soap

High

moisturizing

  • Tone

  • Zest

7

4

  • Lever 2000

  • Dove

2

5

  • Safeguard

  • Lux

8

Nondeodorant

Deodorant

3

1

  • Lava

  • Dial

“Product Space”Representing Consumers’ Perception for Different Brands of Bar Soap

  • Lifebuoy

6

Low

moisturizing


Plot these cars on this positioning map l.jpg

Plot these cars on this Positioning Map

Expensive Inexpensive Conservative Sporty

  • Honda Accord

  • Jaguar

  • Toyota Yaris

  • VW Golf

  • BMW 300 series

  • Skoda Fabia

  • Porche

  • Place other cars on the map

  • What other criteria would we add to improve the map's usefulness?

Expensive

Inexpensive

Conservative

Sporty


Construct a competitive positioning map l.jpg

Construct a Competitive Positioning Map

  • for the clothing areas of the following retailers

    • Next

    • Marks and Spencer

    • Primark

    • Miss Selfridge

    • Asda (George)

    • H&M

    • La Senza

    • Coast


Non profit market segmentation l.jpg

Non-profit market segmentation

  • Is segmentation for nonprofit marketers of more, less, or the same importance than for profit-oriented marketers?

  • Examples ?


  • Login