Title

Report
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Learning Objectives
LEARNING OBJECTIVES

How does a firm decide what type of
segmentation strategy to use?

What is the best method of segmenting a market?

How do firms determine whether a segment is
attractive?

What is positioning and how do firms do it?
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Coke Zero
Why a new
Diet Soda?
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Segmentation, Targeting,
Positioning Process
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Step 1: Establish Overall Strategy or
Objectives
Check Yourself
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Derived from mission
and current state
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Segmentation Strategy
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A firm’s segmentation strategy must be
consistent with and derived from the firm’s
_______________, as well as its current situation.
A.
perceptual map
B.
disclosure statement
C.
mission and objectives
D.
self-concept
E.
lifestyle
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Step 2: Describe Segments
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Geographic Segmentation
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Demographic Segmentation
Most common
segmentation strategy
U.S. Census Bureau Website
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Demographic segmentation is the most common basis of
consumer market segmentation, because these segments are:
A.
easy to define and usually easy to reach.
B.
psychographically distinct.
C.
self-value, self-contained segments.
D.
defined by the benefits consumers’ receive.
E.
all of the above.
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Balancing Act Career Moms
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Psychographic Segmentation
Psychographic
Self-values
Self-concept
Lifestyles
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VALS Framework
VALS Website
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Benefit Segmentation
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Geodemographic Segmentation
Claritas Website
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State Farm Not Insuring Mississippi
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Loyalty Segmentation
Much cheaper to keep an
existing customer
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Lifetime value
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One of the reasons marketers utilize
_______________ segmentation is the high cost of
finding new customers.
A.
geographic
B.
benefit
C.
psychographic
D.
loyalty
E.
geodemographic
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Step 3: Evaluate Segment
Attractiveness
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Identifiable
•
•
•
Who is in their market?
Are the segments unique?
Does each segment require a unique marketing mix?
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Substantial

Too small and it is
insignificant

Too big and it might
need it’s own store
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Reachable
Know the
product exists
Understand
what it can do
Recognize
how to buy
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Responsive
Customers must:
React positively to firm’s
offering
Move toward the firms
products/services
Accept the firm’s value
proposition
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Profitable
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Profitable Segments
Is this segment profitable?
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Segment size = 60 million
(<15 yrs)

Segmentation Adoption
Percentage = 35%

Purchase Behavior = $500
x 1 time purchase

Profit margin % = 10%

Fixed Cost = $50M
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Step 4: Selecting a Target Market

How does Hallmark
select target markets?
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Segment Attractiveness
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Step 5: Identify and Develop
Positioning Strategy
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Step 5: Identify and Develop
Positioning Strategy
Value
Salient Attributes
Symbol
Competition
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Value
How can marketers
appeal to price
sensitive customers
like Grandpa Tony?
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Meet Grandpa Tony, now
retired:

He knows the price of
everything.

He clips coupons.

He goes to multiple stores to
get the best price.

He is willing to pay more for
quality.

He trusts brand names.
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Value

Meet Celia, college freshman:

Reasons for her college choice:

Close to home.

Good academic reputation.

Good financial aid package.

Did we mention cute guys?
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What were the
salient attributes of
your college choice?
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Symbol
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Competition
Position against a
specific competitor
Position against an
entire product
classification
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Positioning
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When selecting a target market, a marketer
should:
A.
determine a customer’s objective.
B.
describe past market segments.
C.
evaluate the attractiveness of each
consumer.
D.
Match the firm’s competency with a market
segment’s attractiveness.
E.
identify a positioning strategy.
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Check Yourself
1.
Identify the steps in the segmentation
process
2.
What are the four segmentation
strategies?
3.
What are the various segmentation
methods?
4.
Identify four positioning strategies.
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Positioning Steps
1. Determine consumers’ perceptions and
evaluations in relation to competitors’.
2. Identify competitors’ positions
3. Determine consumer preferences.
4. Select the position.
5. Monitor the positioning strategy.
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Perceptual Maps
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Check Yourself
1.
What is a perceptual map?
2.
Identify the five positioning steps.
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Repositioning
Disposal
freshener
Fridge
freshener
Tooth
cleaner
Stain
remover
Baking
Cleaner
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Volcano
maker
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Glossary
Benefit segmentation groups consumers on the
basis of the benefits they derive from products or
services.
Return to slide
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Glossary
Demographic segmentation groups consumers
according to easily measured, objective
characteristics such as age, gender, income, and
education.
Return to slide
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Glossary
Geodemographic segmentation uses a combination
of geographic, demographic, and lifestyle
characteristics to classify consumers.
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Glossary
Geographic segmentation organizes customers into
groups on the basis of where they live.
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Glossary
Loyalty segmentation classifies customers by
whether they buy almost exclusively from the
firm.
Return to slide
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Glossary
Psychographic segmentation, or psychographics,
allows people to describe themselves using
characteristics that help them choose how they
occupy their time (behavior) and what underlying
psychological reasons determine these choices.
Return to slide
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Glossary
The Value and Lifestyle Survey (VALS) is a
psychographic tool that classifies consumers into
eight categories based on their answers to a
questionnaire.
Return to slide
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