psychographic segmentation
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Transcript psychographic segmentation
Chapter 4:
Market Segmentation
and Other Strategies
Concept of Target Segments
consider what makes various groups of
consumers different; why they buy as they do
different segments are motivated by different
things and find different appeals attractive
target should be compatible with firm’s goals
must match market opportunity with resources
target segments must offer potential for profit
must offer opportunity to compete effectively
Nature of Segmentation
involves developing a different marketing
approach for different groups of customers
segments should be as homogeneous as possible
more efficient use of marketing resources
advertising and promotions can be targeted
data bases allow better targeting for some firms
but may increase marketing expenditures in
some cases as different programs are required
Identifying Segments
analysis often reveals opportunities or
gaps in the market
also may result in identifying segments
whose needs are not currently being met
generally will require measurement of
market potential and of sales to be
realized from each segment
Essence of Segmentation
can’t be all things to all people; it’s an
efficiency strategy
branding and packaging variations allow
a company to target more segments
large volumes of data allow for easier
identification of segments
minimizes misallocation of resources
Conditions for Segmentation
basis for segmentation must be measurable and
the data accessible
the targeted market segment itself must be
accessible through existing channels and media
each segment should be large enough to be
profitable; should have good buying potential
easiest to look at segments in terms of location
and demographic profile
what is important is different across segments
Bases for Segmentation
may segment the B2C market on:
geographic bases: where they are located
demographics: what their characteristics are
psychographic: their attitudes and values
behavioural: why/how they use the product
geographic segmentation involves considering
differences across consumer groups based upon where
they live and how this affects lifestyle
many changes and differences across regions
Figure 4-1 Provincial Distribution of Canadian Population 2000
& Projected Growth to 2006
Segmentation by Demographics
identifying the target segment involves
developing a detailed profile of its members
demographic differences are easiest to
observe; but are very simplistic
consider differences across segments based
upon age, gender, stage of life cycle,
education, ethnic background, or occupation
think about the target demographic segments
for some new products and services
Figure 4-2 The Family Life Cycle
Segmentation by Income
income has considerable influence on how people
buy and is an important basis for segmentation
there is an important distinction between
disposable income and discretionary income
think about the factors that contribute to
household buying power
people spend differently at different life cycle
stages and in different income groups
Psychological Segmentation
personality characteristics definitely influence
consumer behaviour; but personality is not a
very effective basis for segmentation
consumer lifestyle has become a more widely
used basis for segmentation, as consumers tend
to buy products and services that are consistent
with their lifestyles
psychographic segmentation employs a variety
of psychological and behavioural descriptors
Psychographic Segmentation
involves the identification of segments of the
market, based upon differences on a variety of
measures
these include values; the principles that guide
how we live our lives, but the relative
importance of which vary across individuals
other measures often used in psychographic
research include attitudes, opinions, interests,
and various behavioural measures such as media
usage and leisure-time activities
Relationship Segmentation
segments markets on the kind of
relationship the customer has or wants
to have with the company
some customers want a very close
relationship, others do not
requires a detailed understanding of the
current nature and state of the
relationship
Behavioural Segmentation - 1
marketers often segment markets based on
how consumers interact with the product
different consumers will seek different
benefits from a product or service and will
associate it with different occasions
benefits arise not only from the product but
from the process of acquiring it
marketers must determine exactly what
benefits are important to the customer
Behavioural Segmentation - 2
a widely-used approach to segmentation
involves dividing the market on the basis of
usage rates; many marketers target the “heavy
half” (i.e. those who are heavy users)
many marketers are now segmenting markets
on the basis of the occasions that customers
associate with use of the product
once segments have been identified, profiles of
segment members should be prepared
Selecting Target Markets
target segments should be compatible with the
organization’s goals and image
the market opportunity represented by the
segment must match the company’s resources
the segment must represent an opportunity to
produce enough sales to generate a profit
the company should select target segments
where it can enjoy a competitive advantage
Figure 4-3
The Three Target Market Strategies
Target-Market Strategies
market aggregation: target the offer to a mass
market with little differentiation
single-segment segmentation: selecting a single
segment to target; if the segment is small, this
may be considered a “niche” strategy
multiple-segment segmentation: identifying two
or more segments as target markets; involves
developing a different approach for each
Implications of Segmentation
market aggregation is really a production-
oriented strategy; it requires that the firm find
some way to differentiate its product or service
increasingly, firms are turning to superior
service as their differentiating strategy
multiple-segment marketing requires that the
firm develop different versions of the product
offering for each segment; or it may simply
mean different approaches to serving segments
Positioning - 1
positioning is a strategy for locating a brand or
company in the consumer’s mind with respect
to its rating on certain attributes
consider what position the brand or company
occupies in the minds of consumers; very
much related to the concept of image
the appropriate image is created mainly
through the use of marketing mix variables
Positioning - 2
may decide to position against competitors;
either in direct comparison, or by trying to
occupy the same position
or may position by appealing to a specific
segment of the market; the position is closely
tied to characteristics of the target segment
or may position on the basis of certain
characteristics of the brand or company; may
want to address a market gap or set the brand
apart from obvious competitors
Niche Marketing
this is a specific form of positioning; the
company decides to occupy a market niche
where it can be distinct and competition weak
identify segments that are not well served
determine how to gain a competitive advantage
expand the niche by meeting consumer needs
defend the niche position by improving product
and service offerings
Positioning Strategies
take on the competition head-on
occupy a gap in the market
set a brand apart from the competition
occupy a position of leadership
appeal to certain lifestyle segments
from time to time, it may be necessary for a
firm to reposition its brand or the company
itself; change its image in consumers’ minds