Consumer Behavior,

Ninth Edition

Schiffman & Kanuk

Copyright 2007 by Prentice Hall

Chapter 3

Market Segmentation

Consumer Behavior,Ninth Edition

3 - 2

Exercise 1

• For each of the following products, identify

the segmentation base that you consider to

be the best one for targeting consumers:

(a) coffee

(b) soups

(c) home exercise equipment

(d) portable telephones

(e) nonfat frozen yogurt.

Explain your choices

3 - 3

Exercise 2

• Find three advertisements that you

believe are targeted at a particular

psychographic segment. How effective

do you think each ad is in terms of

achieving its objective? Why?

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Exercise 3

• Given the business challenges of the last few years, companiesmust always look for new ways to retain customers andenhance the value experience brought to them. One companythat has specialized in this art is Carnival Cruise Lines. Carnivalhas learned how to target potential customers, provide fun andexcitement for current customers, and bring loyal customersback again and again. Personal attention, e-mail reminders, andan interactive Web site have aided the company in building andmaintaining relationships with customers. Your group’sassignment is to construct a segmentation profile of Carnival’sfirst time customers, current customers, and past customers.Though information specifics will be beyond your grasp,general information about these groups can be obtained via thecompany’s Web site (see www.carnival.com).

• Your profiles should consider age, income, lifestyle, and othervariables in chapter 3.

• Based on your profiles, comment on any new perceivedopportunities for Carnival based on your segmentation work.

3 - 5Copyright 2007 by Prentice Hall

Chapter Outline

• What Is Market Segmentation?

• Bases for Segmentation

• Criteria for Effective Targeting of

Segments

• Implementing Segmentation Strategies

3 - 6Copyright 2007 by Prentice Hall

Market Segmentation

The process of dividing a

potential market into

distinct subsets of

consumers and selecting

one or more segments as

a target market to be

reached with a distinct

marketing mix.

3 - 7Copyright 2007 by Prentice Hall

Three Phases of Marketing

Strategy

Phase 2

Target Market and Marketing Mix Selection

Phase 3

Product/Brand Positioning

Phase 1

Market Segmentation

3 - 8Copyright 2007 by Prentice Hall

Ryka produces

sneakers that

meet the special

needs of

women’s feet.

3 - 9Copyright 2007 by Prentice Hall

Discussion Question

• Considering the largest bank in your

college’s city or town:

– How might consumers’ needs differ?

– What types of products might meet their

needs?

– What advertising media makes sense for

the different segments of consumers?

3 - 10Copyright 2007 by Prentice Hall

Bases for Segmentation

• Geographic

• Demographic

• Psychological

• Psychographic

• Sociocultural

• Use-Related

• Usage-Situation

• Benefit Sought

• Hybrid

3 - 11Copyright 2007 by Prentice Hall

Market Segmentation

Occupation

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Geographic Segmentation

Climate

Density of area

City Size

Region Southwest, Mountain States, Western

Major metropolitan areas, small cities, towns

Urban, suburban, rural

Hot, humid, rainy

Demographic Segmentation

Income

Marital status

Gender

Age Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+

Male, female

Single, married, divorced, living together, widowed

Under $25,000, $25,000-$34,999, $35,000-$49,999,

$50,000-$74,999, $75,000-$99,999, $100,000 and over

Education Some high school, high school graduate, some college,

college graduate, postgraduate

Professional, blue-collar, white-collar, agricultural,

military

3 - 12Copyright 2007 by Prentice Hall

Market SegmentationSEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Psychological Segmentation

Learning-involvement

Perception

Personality

Needs-motivation Shelter, safety, security, affection, sense of self-worth

Extroverts, novelty seeker, aggressives, innovators

Low-risk, moderate-risk, high-risk

Low-involvement, high-involvement

Psychographic

Religion

Cultures

(Lifestyle) Segmentation Economy-minded, outdoors enthusiasts, status seekers

French, South Indian

Hindu, Catholic, Muslim, other

Family life cycle

Social class Lower, middle, upper

Bachelors, young married, empty nesters

Attitudes Positive attitude, negative attitude

Sociocultural Segmentation

3 - 13Copyright 2007 by Prentice Hall

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Use-Related Segmentation

Brand loyalty

Awareness status

Usage rate Heavy users, medium users, light users, non users

Unaware, aware, interested, enthusiastic

None, some, strong

Use-Situation Segmentation

Time Leisure, work, rush, morning, night

Person Self, family members, friends, boss, peers

Benefit Segmentation Convenience, social acceptance, long lasting, economy,

value-for-the-money

Demographic/

Psychographics

Combination of demographic and psychographic profiles

of consumer segments profiles

Hybrid Segmentation

Market Segmentation

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Geographic Segmentation

The division of a total potential

market into smaller subgroups on

the basis of geographic variables

(e.g., region, state, or city)

3 - 15Copyright 2007 by Prentice Hall

Demographic Segmentation

• Age

• Gender

• Marital Status

• Income, Education, and Occupation

3 - 16Copyright 2007 by Prentice Hall

Web sites for Singles

Looking for a Match

Match.com targets all

singlesThe Right Stuff

targets only Ivy

League graduates

weblink weblink

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Psychological Segmentation

• Personality

• Perceptions

• Attitudes

3 - 18Copyright 2007 by Prentice Hall

Two High-End Watches for Different

Psychological Segments

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Psychographic Segmentation

• Also known as Lifestyle Analysis

• Psychographic variables include

attitudes, interests, and opinions

(AIOs)

3 - 20Copyright 2007 by Prentice Hall

weblink

Opinions

and Attitudes

ADBUSTERS

Web site is

targeted to

consumers

with a certain

attitude toward

advertisers

3 - 21Copyright 2007 by Prentice Hall

Sociocultural Segmentation

• Family Life Cycle

• Social Class

• Culture

3 - 22Copyright 2007 by Prentice Hall

Family Life Cycle Advertising

Video cameras

are often

purchased by

young couples

with children.

3 - 23Copyright 2007 by Prentice Hall

Use-Related Segmentation

• Rate of Usage

– Heavy vs. Light

• Awareness Status

– Aware vs. Unaware

• Brand Loyalty

– Brand Loyal vs. Brand Switchers

3 - 24Copyright 2007 by Prentice Hall

Usage-Situation Segmentation

• Segmenting on the basis of special

occasions or situations

• Example Statements:

– Whenever our daughter Jamie gets a raise,

we always take her out to dinner.

– When I’m away on business, I try to stay at

a suites hotel.

– I always buy my wife flowers on

Valentine’s Day.

3 - 25Copyright 2007 by Prentice Hall

Benefit Segmentation

Segmenting on the basis of the most

important and meaningful benefit

3 - 26Copyright 2007 by Prentice Hall

Band-aid

offers “flex”

as a

benefit to

consumers.

3 - 27Copyright 2007 by Prentice Hall

Hybrid Segmentation

Approaches

• Psychographic-Demographic Profiles

• Geodemographic Segmentation

• SRI Consulting’s VALS

– http://www.strategicbusinessinsights.com/

vals/presurvey.shtml#start

3 - 28Copyright 2007 by Prentice Hall

Criteria for Effective Targeting of

Market Segments

• Identification

• Sufficiency

• Stability

• Accessibility

3 - 29Copyright 2007 by Prentice Hall

Implementing Segmentation

Strategies

• Concentrated Marketing

– One segment

• Differentiated

– Several segments with individual

marketing mizes

3 - 30

Exercise

• SRI Consulting’s VALS

– http://www.strategicbusinessinsights.com/

vals/presurvey.shtml#start

Copyright 2007 by Prentice Hall