Segmenting and Targeting

1. Segmenting and Targeting

2. Announcement • August 10 at the CICC • All students are invited to the Obra Negosyo Exhibit.

3. Source: http://www.un.org/staffdevelopment/pdf/Designing%20Recruitment,%20Selection%20&%20Talent%20Management%20Model%20tailored%20to%20meet%20UNJSPF's%20Business%20Development%20Needs.pdf Changing Age Structure of the Population • Traditionalist – 1925 – 1945 • Baby boomers – 1946-1964 • Generation X –1965-1980, the “birth dearth” • Generation Y (echo boomers) –1981 – 2000 • Generation Z – after 2000

4. Baby Boomers (1946 – 1964) • One of the most powerful forces shaping the marketing environment • They spend millions of pesos on travel, active vacations, adventures • Maturing boomers are experiencing the pangs of midlife and rethinking the purpose and value of their work, responsibilities and relationships

5. Generation X (1965 – 1980) • Douglas Coupland calls them “Generation X” because they lie in the shadow of the boomers and lack obvious distinguishing characteristics. Others call them ‘baby busters’ • Time when more mothers started working • Time of recession and corporate downsizing, they have developed a more cautious economic outlook. • GenXers are more skeptical, cynical of frivolous marketing pitches that promise easy access. • They are value conscious buyers. They care about environment and respond favorably to socially responsible companies

6. The Echo Boomers (1981 – 2000) • Still forming its buying preferences and behaviors. • First to grow up surrounded by digital media

7. Other Issues • Geographic Shifts in Population (migration movement) • Better educated people want go work abroad • Increasing Diversity (ethnic and racial make up)

8. Competitors • To be successful, a company must satisfy needs and wants of consumers better than competitors

9. 4 levels of Competitors • A company can view its competitors as other companies that offer similar products and services to the same customers at a similar price. (Jollibee vs McDo) • A company can see its competitors as all companies making the same product or class of products. (Jollibee vs all fast foods)

10. 4 levels of Competitors • A company can see its competitors more broadly as all companies supplying the same services. (Jollibee vs ALL restaurants and other suppliers of prepared food-supermarket) • A company can see its competitors even more broadly as all companies that compete for the same customer pesos. (Jollibee vs grocery stores and home cooked meals)

11. What’s the competitive environment of your market? • Evaluate the 4 levels of competitors for your product. • What are the strategies of your competitors to increase • Share of Market • Share of Mind “the first bank that comes to mind” • Share of Heart “the bank from whom clients would ‘prefer’ to bank with.”

12. The Essentials

13. Outline • Segmentation • Kotler and Keller, Marketing Management 12th edition (Prentice Hall) 2006 • Kotler, Bowen and Makens, Marketing for Hospitality and Tourism, 3rd Edition, 2003 • Under-served Segment • Targeting

14. What’s Segmentation? • it means to divide a certain market for a product into groups of customers to identify needs and characteristics • Segmentation is toIDENTIFYneeds and wants of different markets. • It is identifying and analyzing subgroups of buyers in a product-market with similar response characteristics (e.g. frequency of purchase)

15. Empowered media users control and shape content To stand out from the crowd Hundreds of channels plus video on demand Age of the special interest: a magazine for every age and affinity group. Ex: WIRE, Golf Niche brands, product extensions and mass customization mean many product variations

16. How to Segment?Market Segments Variables • Geographic: • Region (Luzon, Visayas, Mindanao) • City or Metro Size • Density (Urban, Suburban, Rural) • Climate (Northern, southern)

17. How to Segment?Market Segments Variables • Demographic • Age; Gender • Family Size; Family Life Cycle • Income; Occupation • Education • Religion • Race; Nationality

18. How to Segment?Market Segments Variables • Psychographic • Social Class • Lifestyle • Personality • Media Habits

19. How to Segment?Market Segments Variables • Behavioral • Occasions (regular or special) • Benefits (quality, service, economy, speed) • User status (nonuser, ex-user, potential user, first time user, regular user) • Usage rate • Readiness Stage (unaware, aware, informed, interested) • Attitude towards product (enthusiastic, positive, indifferent, negative, hostile)

20. Requirement for Effective Segmentation • Measurability– in terms of population size, purchasing power and product usage frequency • Accessibility– it can be reached and served by the brand’s marketing capabilities

21. Requirement for Effective Segmentation • Substantiality– substantial in market size to be worth developing a marketing program for it; profitable enough • Action-ability– the degree to which effective programs can be designed for attracting and serving segments.

22. Three Alternative Market Coverage Strategies 2B 2 B 1 A 1A 1 A 1A 3 B 3B 1 B 1B 3 A 3A Market Segmentation by income classes 1,2 and 3 Market Segmentation by age classes A and B Market Segmentation by income-age class

23. Samples of Segmentation for a Travel Agency Demographics Lifestyle Usage Behaviors • Age • Income • Marital Status • Household • Education • Occupation • Psychological • Perception • Personal Reasons for Using • Social Aspect • Gift • Frequency of Use • Attitudes • Values • Activities • Interests • Opinions • Political Orientation Healthy senior/retired women who love to travel in groups. Business travellers, looking for value fares. Social Class AB (top managers) and those that value comfort and image more than the cost of travel.

24. Outline • Segmentation • Under-served Segment • De Asis, Karen Ph.D. Ed., Color Folders in the Mind: A Branding Story (2007) • Targeting

25. Under-served Segments • The active silver citizen • Modern Men • Male Homemakers • Indulgent Women • Tweens • Ethical Consumers

26. Under-served Segments • Theactivesilver citizen • As of May 1, 2010 Philippine Population 92.34 Million • Approximately 9 M who are 55-74 years old http://www.census.gov.ph/data/sectordata/popproj_tab4r.html • ModernMen • Rising number of single households (men marrying later – they do their own shopping) • Married men sharing responsibilities with their spouse (dual working parent households) • Metro-sexual

27. Under-served Segments • MaleHomemakers • More men are taking active roles in the homes • Separated or widowed, have absentee housewives who are working overseas, or married to women who are not skillful in homemaking. • IndulgentWomen • Women who have ‘pocket power’. • More women working and earning more than men or their husbands

28. Under-served Segments • TheTweens • Ages 7-12 years old • James McNeal, professor of marketing at Texas A&M University, “spending on advertising targeted at children has been growing at 15 to 20 percent for the past six or seven years simply because children’s spending power has been growing at a similar rate.” • In the Philippines approximately 13 M

29. Under-served Segments • EthicalConsumers • Increasing number of consumers making socially responsible and ethical choices • Consumers buying food, fashion and personal care products on sustained societal values and do-good marketing platforms. • Environmental Friendly products (water, air, earth)

30. Outline • Segmentation • Under-served Segment • Targeting

31. Target Market • Targeting is choosingWHICH segment of the market you would like to catch. • The purpose for segmenting a market is to allow your marketing program toFOCUSon the subset of prospects that are “most likely” to purchase your offering. • You need to FOCUS because your resources are LIMITED.

32. Target Market • Philip Kotler • Defines target market as a GROUP OF CUSTOMERS, whether individuals or organizations, to whom a marketing program is ADDRESSEDto or DIRECTEDat.

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