[Cover image here]

chapter6

Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinContemporary Advertising, 11e

Market Segmentation and the Marketing Mix:

Determinants of Advertising Strategy

How marketers use behavioral characteristics to cluster customers

into market segments

Chapter

6-3

Chapter 6 Objectives

Identify methods advertisers use to segment consumer

and business markets

Explain the importanceof aggregation

Discuss how target marketing affects advertising strategy

Describe the elementsof the marketing mix and

advertising’s role in the mix

Explain the purpose and importance of branding

6-4

The Market Segmentation Process

1. Identify people with shared needs and characteristics

6-5

The Market Segmentation Process

2. Aggregate these groups into market segments according to their mutual interest in the product’s utility

1. Identify people with shared needs and characteristics

6-6

Sole Users

Semi-Sole Users

Discount Users

Aware Nontriers

Trial/Rejectors

Repertoire Users

Volume Segmentation

Benefit Segmentation

Market Segmentation

User-Status VariablesBehavioristic

Purchase-Occasion Variables

Benefits-Sought Variables

Usage-Rate Variables

6-7

Market Segmentation

User status: Mammut ad targets its repertoire users who are concerned with quality

Insert photo 6.4, p. 171

Mammut ad

Position = 2.9“ horizontal, 1.5“ vertical

Size = 5.7” WIDE

Resolution = 300 dpi

6-8

Market Segmentation

Purchase occasion: Columbia seasonal gear ad

Insert photo 6.5, p. 172

Columbia sportswear ad

Position = 2.9“ horizontal, 1.5“ vertical

Size = 5.7” WIDE

Resolution = 300 dpi

6-9

Geodemographic Segmentation

User Status Variables

Purchase-Occasion Variables

Benefits-Sought Variables

User-Rate Variables

User Status, User Rate, Purchase Occasion, & Benefits-Sought Variables

Market Segmentation

Behavioristic

Geographic

Demographic

6-10

Insert ex. 6.3, p. 174

Hispanic Media Ad Spending Growth Rates (2002-2005) bar graph

Position = 2.9” horizontal, 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

Market Segmentation

Demographic segmentation: Hispanic ad spending growth by medium

6-11

Market Segmentation

Demographic segmentation: Heavy usage patterns of various age groups

Insert ex. 6.4, p. 175

Heavy usage patterns of various age groups

Position = 2.9” horizontal, 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

6-12

Market Segmentation

User Status, User Rate, Purchase Occasion, & Benefits-Sought VariablesBehavioristic

Geographic

Demographic Geodemographic Segmentation

Psychographic VALS

BehaviorGraphics

MindBase

6-13MarketSegmentationPsychographic segmentation: VALS

Insert ex. 6.5, p. 177

VALS classification system

Position = 0.35” horiz., 0.4” vertical

Size = 5.75” TALL

Resolution = 300 dpi

6-14

Market Segmentation

Psychographic segmentation: Adidas placed ads along the Boston Marathon route to target young people who define themselvesby their athletic achievements

Insert left panel of Adidas ad(p. 180)

(ritual/shock/denial/isolation ad panel)

Position = 2.9” horizontal, 1.5” vertical

Size = 2.8”wide

Resolution = 300 dpi

Insert right panel of Adidas ad(p. 180)

(affirmation/despair/renewalad panel)

Position = 5.9” horizontal, 1.5” vertical

Size = 2.8” wide

Resolution = 300 dpi

6-15

Insert ex. 6.7, p. 179

MindBase segments

Position = 2.9” horiz., 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

Psychographic segmentation: MindBase

Market Segmentation

6-16Market Segmentation:Business, Government, & Industry

Complexity:Manufacturers, Resellers,

Brand Partnerships

Organizationalbuying

behavior

Fewer, more-concentrated

buyers

Differencesfrom Consumer

Markets

6-17

Insert ex. 6.8, p. 182

NAICS hierarchy and codes

Position = 2.9” horiz., 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

The NAICS hierarchy and codes can be used to search for prospective clients

Market Segmentation:Business, Government, & Industry

6-18

The Target Marketing Process

2. Use the 4Ps of the marketing mix to shape a product concept for the market

1. Select a target market from the market segments identified

Product Price Place Promotion

6-19

Target Market Selection

Harley-Davidson ad appeals to likely customers who want to stand out in the ordinary

Insert photo 6.10, p. 186

Harley-Davidson ad

Position = 2.9” horizontal, 1.5” vertical

Size =5.7” WIDE

Resolution = 300 dpi

6-20

The Product Element

Life Cycle ClassificationPositioning & Differentiation

Branding Packaging

• Introduction• Growth• Maturity• Decline

• Tangible Goods• Equipment- based services• People- based services

• Perceptible• Hidden• Induced

• Individual• Family• National• Private Label• Licensed

• Identification• Containment• Protection• Convenience• Consumer appeal• Packaging can pay for itself

Insert ex. 6.11, p. 188

Product life cycle curve

Position = 2.66” horizontal, 1.26” vertical

Size = 5.84” WIDE

Resolution = 300 dpi

6-21

The Product Element

Life Cycle ClassificationPositioning & Differentiation

Branding Packaging

• Introduction• Growth• Maturity• Decline

• By market• By rate of consumption• By tangibility• By buying habits• By physical description

• Perceptible• Hidden• Induced

• Individual• Family• National• Private Label• Licensed

• Identification• Containment• Protection• Convenience• Consumer appeal• Packaging can pay for itself

6-22

The Product Element

Life Cycle ClassificationPositioning & Differentiation

Branding Packaging

• Introduction• Growth• Maturity• Decline

• By market• By rate of consumption• By tangibility• By buying habits• By physical description

• Perceptible• Hidden• Induced

• Individual• Family• National• Private Label• Licensed

• Identification• Containment• Protection• Convenience• Consumer appeal• Packaging can pay for itself

6-23

Volvo positions itself as owning safety

The Product Element

Insert photo 6.13, p. 191

Volvo ad

Position = 2.93” horizontal, 1.5” vertical

Size = 5.75” WIDE

Resolution = 300 dpi

6-24

The Product Element

Life Cycle ClassificationPositioning & Differentiation

Branding Packaging

• Introduction• Growth• Maturity• Decline

• By market• By rate of consumption• By tangibility• By buying habits• By physical description

• Perceptible• Hidden• Induced

• Individual• Family• National• Private Label• Licensed

• Identification• Containment• Protection• Convenience• Consumer appeal• Packaging can pay for itself

6-25

Insert ex. 6.14, p. 193

World’s most valuable brands

Position = 2.9” horizontal, 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

The Product Element

World’s most valuable brands

6-26

The Product Element

Life Cycle ClassificationPositioning & Differentiation

Branding Packaging

• Introduction• Growth• Maturity• Decline

• By market• By rate of consumption• By tangibility• By buying habits• By physical description

• Perceptible• Hidden• Induced

• Individual• Family• National• Private Label• Licensed

• Identification• Containment• Protection• Convenience• Consumer appeal• Packaging can pay for itself

6-27

The Price Element

Demand

Production &Distribution

Competition

Corporate Goals & Strategies

Price Factors: Insert ex. 6.15, p. 196

Demand vs. price, supply vs. price graph

Position = 2.9” horizontal, 1.5” vertical

Size = 5.7” WIDE

Resolution = 300 dpi

6-28

The Place (Distribution) Element

Intensive Selective

Exclusive

Direct

Indirect

Vertical

Network Buyer Club

Franchises

6-29

The Promotion Element

CollateralMaterials

SalesPromotion

ProductAdvertising

PersonalSelling

PublicRelations

MarketingCommunication

Types