Download Lecture 7

The Consumer Audience
Week 4
Lecture 7
Steps to Segmentation
1. Identify market type
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Homogenous
Heterogeneous
• Examples:
– Telecom companies
launch campaigns
– Petrol company ads
Steps to Segmentation
1. Identify market type
2. Dividing the market
into groups of
people with similar
characteristics in
certain key productrelated areas
(Segment)
Steps to Segmentation
1. Identify market type
2. Segment
3. Identify the group
that will be the most
profitable audience /
is most likely to
respond to the
message (Target)
Why Use Segmentation Approach?
• Precisely match needs & wants of
customers with high buying potential
– Advertising messages
– Product variations
• Save on wastage in media plans
• Generate more sales
Segmentation Approaches
Demographics
Age & Life Stage
Gender
Ethnicity
Religion
Income
Education
Household Size
Psychographics
Society/Culture
Lifestyle
Personality
Geographics
International
National
State
City
Climate
Urban/Rural
Customer-Oriented
Benefits Sought
Behavior Traits
Usage Rates
User Status
Brand Loyalty
Product-Oriented
Specific Problems
solved by product
Specific Benefits
offered
Demographics
• Are statistical, personal, social & economic
characteristics used to describe a population
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Age
Gender
Education
Income
Occupation
Race / Ethnicity
Family Size
Geographic
• The area in which the target market lives
– Urban / Suburban
– City
– Province
– National
– International
– Climate
Psychographic
• Refers to lifestyles & psychological characteristics such
as values, attitudes, beliefs, personality, motivations,
interests & opinions
– Activities (Hobbies, shopping, entertainment, social events…)
– Opinions (Self, social issues, morality, culture, business, religion,
environment, society…)
– Interests (family, job, community, fashion, food, health…)
– Trends & Fads
Important Components
• Culture & Values
• Freedom, independence, individualism,
collectivism, achievement, respect, excitement,
openness, conservativeness, need for selffulfillment, long-term orientation, superiority, etc…
• Reference Groups – guides for behavior
• Social Class
Usage Behavior
• How much of a product category or brand
a customer buys or may buy or how willing
people are to innovate
Consumer Categories Based on Product Usage
Usage Rates
Brand Relationship
Innovation
Light
Non-Users
Innovators
Medium
Ex-Users
Early Adopters
Heavy
Regulars
First-Timers
Loyal Users
Switchers
Early Majority
Late Majority
Laggards
Benefit Segmentation
• Based on consumers’ needs or problems
(or wants) or specific benefits consumers
hope to derive
Maslow’s Hierarchy of Needs
• Primary (Innate) vs. Secondary Needs (acquired)
Relevant Products
Examples
Other Segmentations
• Lifestyles Analysis
– How people allocate time,
energy & money
• VALS – Values & Lifestyle
Analysis
• Sociodemographic
Segmentation
– Baby Boomers, Gen X,
Gen Y, Millenium Kids…
Target Profiling
• Also called Consumer Narrative
• Descriptions of the target audience that read like a
description of someone you know
• Example (for Fishing Boat Charter):
– Married men within 35 – 50 year age bracket with kids up to 3 in
number aged 6 – 16, upper middle class socio-economic
background with income around $90K or more per year. Well
settled in their career with white-collar professional jobs. Reside
in a coastal area of Florida. Busy schedule and usually pre-plan
vacations & value comfort & relaxation over adventure.
Vacations are a way to spend quality family time. Want to be role
models for their sons and have strong progressive family
values… Many have had prior fishing experience…