Transcript Chapter 8
Electronic Marketing Chapter 8 Segmenting and Analyzing the Target Market Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Searching through 130 million households • Services of database-enabled, geo-demographics companies are broad and thorough – Many offer market data, others are mapping firms – Demographic characteristics are reported in households, individuals, or as population percentages – Psychographics reported in percentage of households Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • The value of marketing databases is the classification of like items into smaller groups whereby the marketer finds communication and service easier tasks – Demographics, socioeconomics, housing characteristics, lifestyles, and consumer purchasing behavior – SIC code (Standard Industrial Classification) • Advantages of CRM and database technologies – Segmentation can now be done using “real-time” specific attitudinal and behavioral characteristics – Segmentation using very specific criteria can be accomplished Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Why are the concept and practice of segmentation so important? – Demographers have found that people of similar demographic, economic, and social characteristics tend to live among other similar persons – For marketing purposes, these clusters of people with similar means, aspirations, and motivations can be matched to products and services related to their life circumstances – Discovery of whom is the intended prospect is most important Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Investigating the typical demographic report – Demographics – Demographic updates and projections – Age by income – Occupation and education Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Psychographics, the clustering of households with similar lifestyles – Psychographics is the study of lifestyles – With psychographic data, marketers can segment, locate, quantify, and target their best prospects within a selected geographic area Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Each market segment represents consumers with a unique pattern of purchasing, consumption, media usage, and financial behavior • Psychographic measurement identifies the number and percent of households and population in each market segment to give the marketer an index of comparison Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Researching the habits and lifestyles of chosen markets can improve effectiveness in promotional tools such as media vehicle selection, appeals, advertising scheduling and sales promotion. • There are many lifestyle niches that an individual can occupy, hence the study and application of group psychographics become an important key to marketing Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • The marketer must define the best profiles, one or more that will be most receptive to purchasing the product or service – Selection process should be ranked by number of households or percentage of households – Identify an acceptable aggregate market level Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Marketers can explore psychographic segmentation online through the Internet’s Values and Life Styles (VALS) Web site (http://www.sric-bi.com), a center for psychological and motivational research • Its hypothesis is that all Americans can self-identify themselves into clusters of lifestyles – Eight segments in the traditional VALS2 categorizations – Eight segments in the VALS profiles resulting from recent Internet research Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Basics of Geo-Demographic Analysis • Marketers of consumer products also use behavioral segmentation as a way to divide consumer market – The rationale is toward linking consumer behavior to usage: light, average, or heavy users – The difficulty in labeling consumers as light or heavy users is that identification is not constant through the product categories; consumer usage varies according to products Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Electronic Marketing Tracking Tools • As electronic commerce develops, more and more technology resources will be directed toward identifying and tracking the behavior of online purchasers • Tracking and profiling software, called “cookies,” are easily installed and easily turned off in the computer owned by the Web user • Many persons view these electronic tools as marketing surveillance akin to a breach of privacy Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Electronic Marketing Tracking Tools • Marketers use the information from cookies to track a user’s visits to a page, length of visit, and visited pages’ frequency • Clickstream analysis is a study of consumer response data detailing the content and advertising banners that visitors click on during the online navigation process Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo Art and Science • There are two important areas of judgment in marketing – One area is in the judgment of the creative marketing process in determining whether new sales programs or creative campaigns will “work” – The other area is in market or segment selection in determining who is the appropriate customer for the product or service • Employing psychographics is an art that not every marketer has patience for, but it is a longer-lasting strategy for ultimate success Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo The Segmentation Technique of Geographical Mapping • Utilizing geographical database technique is fast becoming a popular tool for marketers – Databases can contain thousands of variables – Each variable may contain the key information required to make a decision • The marketer that is using a mapping application can pull the same information from a database and apply it to any map Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo The Segmentation Technique of Geographical Mapping • The aspects of mapping include many different levels of – Geography – Carrier routes – Zip codes – Census tracts – Designated Market Areas (DMAs) – States – Custom-created sales territories Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo The Segmentation Technique of Geographical Mapping • Benefits of mapping – Organization – Analysis • Mapping is a front-end display that tells the story of data that are in the background; the map and database must always correlate • It is also critical to have layers on the map up to date Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo The Segmentation Technique of Geographical Mapping • There are three types of database mapping and each function has its benefits to the e-marketer – Site analysis – Territory management – Database plots Electronic Marketing: Integrating Electronic Resources into the Marketing Process, 2e 4/13/2016 2004 Joel Reedy and Shauna Schullo