MAR 3023961

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MAR 3023-961

• Basic Marketing
• Fall 2003St. Petersburg
• September 24, 2003
• Segmentation
• Rich Gonzalez University of South Florida

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URLs (Used Today)

• www.sric-bi.com/
• www.census.gov
• www.thumbdrive.com/
• www.memorexthumbdrive.com/

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Agenda September 24, 2003

• Syllabus Change
• Segmentation and Target Markets
• VALS Demo and Exercise
• Assignment AProgress?
• For October 1

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Syllabus Change

• ReadsSep. 24 Relationship MarketingOct. 1
  Exam
• Now ReadsSep. 24 SegmentationOct. 1
  Relationship Marketing Exam

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Exam 1 October 1

• Chapter 1--Intro
• Chapter 3--Environment
• Chapter 8Segmentation
• Chapter 9Behavior
• Chapter 6Relationship Marketing
• Anything covered in class or assigned readings

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Exam 1----October 1

• After Coverage of Chapter 6
• 45-60 Questions
• MC Mostly
• T/F A Few
• FIB-- A Few
• 2 pencil
• No makeups
• About 1 Hour
• Questions on listserv OK

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Assignment A

• Critical Success Factor
• Customer Satisfaction
• Customer Orientation
• Marketing Concept
• Relationship Marketing .
• Lifetime Customer Value

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Assignment A

• Identify a complaint (product or service)
• Write a complaint letter (preferably not an
  e-mail)
• Find out name of whom to send it to
• Send it
• Resolve complaint (various outcomes are possible)
• Write up a one page summary
• All details for this assignment on the web site

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For Today September 24

• Chapter 8--Segmentation
• Chapter 6Relationship Marketing(Note Video Case
  on Dunkin Donuts on p. VC-8)
• VALS Survey

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For October 1

• Chapter 6Relationship Marketing(Note Video Case
  on Dunkin Donuts on p. VC-8)
• VALS Survey Exercise
• Possible ArticleCheck Listserv

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Last Time

• Consumer BehaviorHow Consumers DecideKnow Your
  Customers
• WBRU VideoCB and Segmentation

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Mantras

• 1--The purpose of a business is to create a
  customer.
• 2--It is the customer who determines what a
  product/service is.
• 3--Know your customer(s).

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Video Case 9.2WBRU Sounds Good to Listeners

• Consumer Behavior Segmentation
• Customer Needs, Reference Groups
• Randy Herschoff, GSM

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The Consumer Decision Process
Problem Recognition
Information Search
Alternative Evaluation
Purchase Decision
Postpurchase Evaluation
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An Integrated Model of the Consumer Decision
Process

• Interpersonal Determinants
• Cultural Influences
• Social Influences
• Family Influences

Problem Recognition
Search
Feedback

• Personal Determinants
• Needs and Motives
• Perception
• Attitudes
• Learning
• Self-Concept

Alternative Evaluation
Purchase
Purchase Evaluation
Purchase Act
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Conceptually

• Lewin
• B f(I,P)
• Consumer Behavior
• function of Interpersonal Influences and
  Personal Factors

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Chapter 8--Begin
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Famous Brokerage Firm

• CD 2 Video

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Charles Schwab Segmentation

• Investment Style
• 1. Delegaters
• 2. Validators
• 3. Self-Directed

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Charles Schwab Segmentation

• Behavioral Elements
• 1. Classic (100K,
• 2. Active Traders (24)
• 3. Hyperactive Traders (48)

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Segmentation
Who are they and how many of them are there?
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Selected Concepts

• Essential components of a market
• Role of market segmentation in developing a
  marketing strategy
• Criteria necessary for effective segmentation
• Four bases for segmenting consumer markets.

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Selected Concepts

• Steps in the market segmentation process
• Four basic strategies for reaching target markets
• Positioning strategies

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No Market Segmentation
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Segmented by Sex
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Segmented by Age
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Market
People or institutions with purchasing power,
authority and willingness to buy.
Is the market stable or dynamic?
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Target Market
Specific group of consumers or buyers most likely
to purchase a particular product or service.
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Consumer Product
Good or service purchased by an ultimate
consumer for personal use.
Are inline skates a consumer product?
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Business Product
Good or service purchased for use either directly
or indirectly in the production of other goods
and services for resale.
Is raw cotton a business product?
Are computers a business product?
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Criteria for Effective Market Segmentation
1. Must present measurable purchasing power and
size. 2. Must find a way to effectively promote
to and serve the market segment. 3. Must
identify segments sufficiently large to give them
good profit potential. 4. Must target segments
that match its marketing capabilities.
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Using Segmentation to Solve a Shift In
Environmental Factors Ross Products
Competitive
Distribution
Product
Political-Legal
Target Market
Social-Cultural
Price
Promotion
Technological
Economic
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Ensure Example

• Ross Products (Abott Labs) baby formula
• Environmental changes2?
• Solution new segment(s)ElderlyFitness/active

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(No Transcript)
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Ensure Example

• Completely different segment(s)
• Still nutritional drinks
• Price strategy?
• Competition?
• Gerber---Resource
• Mead Johnson--Suscatal and Boost

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(No Transcript)
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(No Transcript)
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(No Transcript)
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Market Segmentation
Division of the total market into smaller,
relatively homogeneous groups.
What is homogeneous?
Can we achieve?
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Geographic Segmentation
Dividing an overall market into homogeneous
groups on the basis of population locations.
Can we achieve homogeneity?
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Government Classifications of Urban Data

• Consolidated Metropolitan Statistical Area (CMSA)
  
• Primary Metropolitan Statistical Area (PMSA)
• Metropolitan Statistical Area (MSA)

Can a Statistical Area span across state lines?
Which type is Tampa-St. Petersburg?
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Demographic Segmentation
Dividing consumer groups according to
characteristics such as sex, age, income,
occupation, education, household size, and stage
in the family life cycle.
Are these measurable?
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Family Life Cycle
Process of family formation and dissolution which
affects market segmentation because life stage,
not age is the primary determinant of many
consumer purchases.
How is a 24 y.o. couple who just had a baby
different from a 36 y.o couple who just had a
baby?
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Segmentation Bases

• Geographic
• Demographic Gender, Age, Ethnic Group, Family
  Life Cycle, Household Type, Income and
  Expenditure Patterns
• Psychographic
• VALS2
• Product-Related
• Benefits Sought, Usage Rates, Brand Loyalty

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Demographics

• www.census.gov
• StateCounty---National
• Example of each one

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Population Selected Answers
Florida
U.S.

• 50,000
• 200,000
• 875,000
• 1 Million
• 4 Million
• 7 Million
• 8 Million
• 9 Million
• 14 Million
• 15 Million
• 18 Million
• 20 Million
• 50 Million
• 100 Million
• 2 Billion

• 5 Million
• 10 Million
• 20 Million
• 25 Million
• 45 Million
• 90 Million
• 110 Million
• 260 Million
• 265 Million
• 287 Million
• 600 Million
• 960 Million
• 3.6 Billion
• 7 Billion
• 10 Billion
• 100 Billion
• 500 Billion

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Engels Laws
As family income increases

• Expenditures for food
• Expenditures for housing
• Expenditures on recreation, education, clothes

• Go down percentage-wise.
• Stay the same percentage-wise.
• Increase percentage-wise

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Psychographic Segmentation
Dividing a population into homogeneous groups on
the basis of psychological, value and lifestyle
profiles.
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AIO Statements
Statements in a psychographic survey choices
reflect respondents activities, interests, and
opinions.
Can we really tell what a person is like
psychologically?
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VALS 2
Commercially available system for psychographic
segmentation of consumers Based on resources and
self-orientations..
Who produces VALS2?
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See also table on p238
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Lifestyle Segmentation

• LifestyleBusy, Hectic,ProductivePlanetRx.com---C
  D1
• Benefits?
• Positioning?
• Effective?
• PlanetRX Defunct

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VALS

• Attitudes, Interests, Opinions
• Lets go to http//www.sric-bi.com/

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iVals---Excercise 3

• http//www.sric-bi.com/
• Page 238---Brief explanation
• VALS Category Descriptions online
• Where are you?
• For next Wednesday--- take the VALS survey
  online. Print off a copy, turn in with your name.
  
• Professor gets 1 sheet only

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Vals2 Changes

• Actualizers now Innovators
• Fulfilleds now Thinkers
• Strugglers now Survivors
• Use Old Terminologyi.e., Thinker (formerly
  Fulfilled)

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(No Transcript)
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Five primary purchasing groups for gasoline

• Road Warriors--Middle-aged, higher-income men who
  buy premium gas, as well as sandwiches and drinks
  from station convenience stores. This segment
  spends the most on gasoline purchases.
• True Blues--Men and women with moderate to high
  incomes. Brand loyal and sometimes loyal to
  particular service stations.
• Generation F3--F3 stands for fuel, food,
  fast.These consumers are younger, upwardly
  mobile people constantly on the go. They buy
  heavily from station convenience stores.

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Five primary purchasing groups for gasoline

• Homebodies--Usually housewives, they spend time
  driving their children around during the day.
  They stop at any convenient (and safe) gas
  station.
• Price Shoppers--Not loyal to brands or stations
  and rarely buys premium gas. On tight budgets
  and spend the least amount they can on gas each
  year.

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Product-related Segmentation
Dividing a consumer population into homogeneous
groups based on characteristics of their
relationships to a product.
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Product-related Segmentation
1. Benefits that people seek when they buy a
product. 2. Usage rates for a product. 3.
Consumers brand loyalty toward a product.
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80/20 Principle
Idea that a big percentage of a products
revenues--roughly 80 percent--come from a
relatively small percentage of total
customers--around 20 percent. Pareto Rule late
1890s
Should you prioritize the 20?
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Target Market Decision Analysis
Procedure for evaluating the relevant
characteristics and the prospects for satisfying
business objectives of potential market segments.
How many target markets can you try to serve?
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Market Segmentation Decision Process
Identify Market Segmentation Process
Select Specific Market Segments
Stage I
Develop a Relevant Profile for Each Segment
Do Benefits Achieve Company Goals and Justify
Development?
Stage II
Stage V
Estimate Cost-Benefit for Each Segment
Forecast Market Potential
Stage III
Analyze Competitive Forces Within Each Segment
Determine Marketing Mix to Serve Each Segment
Forecast Own Market Share for Each Segment
Stage IV
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Strategies for Reaching Target Markets

• Undifferentiated Marketing
• Differentiated Marketing
• Niche Marketing
• Micromarketing

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Undifferentiated Marketing
Marketing strategy to produce only one product
and market it to all customers using a single
marketing mix.
What is an example?
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Differentiated Marketing
Marketing strategy to produce numerous products
and promote them with different marketing mixes
designed to satisfy smaller segments.
How does HP do this?
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Niche Marketing
Marketing strategy that commits all of a firms
marketing resources to serve a single market
segment.
i.e., Cosmetics for Hispanic Women
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Micromarketing
Marketing strategy to target potential customers
at basic levels such as by ZIP codes, occupation,
transaction and other very specific details.
Supermarkets track purchases.
Will the Internet enhance this?
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Positioning
Marketing strategy that emphasizes serving a
specific market segment by achieving a certain
position in buyers minds.
Example two dimensions for an automobilePrestige
and Style
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Chrysler PT Cruiser
Very
Prestige
.
Style
High
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Hypothetical Competitive Positioning Map for
Selected Retailers
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Positioning Strategies

• Based on Attributes
• Based on Price/Quality
• Based on Competitors
• Based on Application
• Based on Product User
• Based on Product Class

Positioned where?
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Repositioning
Marketing strategy to change the position of a
product in consumers minds relative to the
positions of competing products.
Think of the Mustang, Winn-Dixie...
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Positioning
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Positioning

• http//www.thumbdrive.com/

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Creative Positioning?

• www.memorexthumbdrive.com/

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Mantras

• 1--The purpose of a business is to create a
  customer.
• 2--It is the customer who determines what a
  product/service is.
• 3--Know your customer(s).