Chapter 2 -Consumer Behavior- Market Segmentation

7/30/2019 Chapter 2 -Consumer Behavior- Market Segmentation

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Copyright 2006

Pearson Education Canada Inc.

Appendix to Part 1

Consumer Behaviour andMarketing Strategy

Consumer Behaviour

Canadian EditionSchiffman/Kanuk/Das


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Copyright 2006 Pearson Education Canada Inc. Appendix-2

Steps in Developing a

Marketing StrategySegment the Market

Choose a Target Market

Decide on a

Position for the Product

Develop a Suitable

Marketing Mix

Find Ways to Satisfy

And Retain Customers


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Market Segmentation

The process of dividing a potential market

into distinct subsets of consumers and

selecting one or more segments as a targetmarket to be reached with a distinct

marketing mix.


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Best Customer Segmentation

High Current Share Low

High

Low

Consumption

Lo Lows

(starve)

Hi Highs

(stroke)

Low Highs

(chase)

Hi Lows

(tickle)


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Purposes of Segmentation

Studies

To discover the needs of specific

consumer groups to develop specialized

products to satisfy specific group needs

(e.g., Centrum http://www.centrum.ca) To guide the repositioning of a product

(e.g., Nintendo http://www.nintendo.ca)

To identify the most appropriate media for

advertising (e.g., People and Teen

People)


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Bases for Segmentation

Geographic Segmentation Demographic Segmentation

Psychological Segmentation

Psychographic Segmentation

Socio-cultural Segmentation

Use-Related Segmentation

Usage-Situation Segmentation

Benefit Segmentation Hybrid Segmentation Approaches


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(continued)


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Figure A-2 (continued)

(continued)


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Figure A-2 (continued)


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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, province,or city).


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Demographic Segmentation

Age

Sex

Marital Status

Income, Education, and Occupation


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Marital Status

Households as a consuming unit

Singles

DivorcedSingle parents

Dual-income married


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Psychological Segmentation

Motivations

Personality

Perceptions

Learning

Attitudes


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AIOs

Psychographic (lifestyle) variables that

focus on activities, interests, and opinions.


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Socio-cultural Segmentation

Family Life Cycle

Social Class

Culture, Subculture, and Cross-Culture


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Family Life Cycle

Phases families go through in their formation,growth, and final dissolution

Bachelorhood

Honeymooners

Parenthood

Post-parenthood

Dissolution

Explicit basis: marital status, family status

Implicit basis: age, income, employment


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Rate of UsageHeavy vs. Light

Convert light users to medium or heavy users

Byidentifying new uses for the productAttempt to satisfy heavy users well

By making sure the product continues to meettheir needs

continued


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Awareness Status

Aware vs. Unaware

Convert unaware to aware Brand Loyalty

Brand Loyal vs. Brand Switchers

Satisfy and reward brand loyal users By providing rewards for continued usage


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Usage-Situation Segmentation

Segmenting on the basis of special

occasions or situations

Example Statements: Whenever I do well in a course, I treat myself with --

-----.

When Im away on business, I try to stay at a suites

hotel.

I always take a bottle of French wine when I am

invited to a friends house for dinner


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Benefit Segmentation

Segmenting on the basis of the mostimportant and meaningful benefit

CrestCavity preventionSensodyneGentle on sensitive teeth

Topolremoval of tobacco stains


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Hybrid Segmentation Approaches

Psychographic-Demographic Profiles

Geodemographic Segmentation

SRI Consulting Groups Values andLifestyle System (VALSTM)


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Criteria For Effective Targeting of

Market Segments

Identification

Sufficiency

Stability Accessibility


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Segmentation Strategies

Concentrated Marketing

focusing on one target market alone

Suitable for small or new companies

Differentiated Marketing

Focusing on several segments at the same

time

Suitable for financially strong companies witha several offerings in a product category

continued


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Segmentation Strategies

Counter-segmentation Strategy

Merging two or more segments into one larger

segmentWhen target markets do not warrant separate

strategies anymore

When consumer needs become more similarover a period

Chapter 2 -Consumer Behavior- Market Segmentation

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