Market segmentation and lifestyle1
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Transcript of Market segmentation and lifestyle1
WHAT IS MARKET SEGMENTATION ?
Market segmentation can be defined as the process of dividing a potential market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. Before the widespread adoption of the marketing concept, the prevailing way of doing business with consumers was through mass marketing --- that is, offering the same product and marketing mix to all consumers. The essence of this strategy was summed up by the entrepreneur Henry Ford, who offered the Model T automobile to the public ---
“ in any color they wanted, as long as it was black.” One of the four groups that have emerged in the VALS system of lassification of consumer psychographics. Actualizers are those consumers who are successful, sophisticated, and active and have dominant characteristics. Their purchases often reflect cultivated tastes for relatively upscale, niche-oriented products
THE REAL FACE OF YOUR SEGMENTS
MARKETING IS ALL ABOUT IDENTIFYING
MARKET SEGMENTATION BASES AND SELECTED VARIABLES
SEGMENTATION BASEGeographic Segmentation
Region
City Size
Density of Area
Climate
Demographic Segmentation
Age
Sex
Martial Status
Income
Education
Occupation
SELECTED SEGMENTATION VARIABLES
North, South, East, West.
Major metropolitan areas, small cities,towns
Urban, suburban, exurban, rural
Temperate, hot, humid
Under 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75+
Male, female
Single, married, divorced, lining together,
widowed
Under $15000,$15000-$24000, $25000-$39999,
$40,000-$64,999, $65,000 and over.
Some high school, high school graduate, some
college, college graduate, postgraduate
Professional, blue-collar, white-collar, agricultural
MARKET SEGMENTATION BASES AND SELECTED VARIABLES
SEGMENTATION BASEPSYCHOLOGICAL /PSYCHOGRAPHIC SEGMENTATIONNeeds-Motivation
PersonalityPerceptionLearning-InvolvementAttitudesPsychographic(Lifestyle)
SOCIOCULTURAL SEGMENTATIONCultureSubculture
ReligionRace/Ethnicity
Social ClassFamily Lifestyle
SELECTED SEGMENTATION VARIABLES
Shelter, safety, security, affection, sense of self
worth
Extroverts, introverts, aggressives, compliants
Low risk, moderate risk, high risk
Low involvement, high involvement
Positive attitude, negative attitude
Swingers, straights, conservatives, status seekers
American, Italian, Chinese, Mexican
Jewish, Catholic, Protestant, other
African-American, Caucasian, Oriental, Hispanic
Lower, middle, upper
Bachelors, young marrieds, empty nesters
MARKET SEGMENTATION BASES AND SELECTED VARIABLES
USE-RELATED SEGMENTATIONUsage Rate
Awareness Status
Brand Loyalty
USE-SITUATIONAL SEGMENTATIONTime
Objective
Location
Person
BENEFIT SEGMENTATION
HYBRID SEGMENTATIONDemographic Psychographic Profile
Geodemographics
VALS 2
Heavy users, medium users, light users, nonusers
Unaware, aware, interested, enthusiastic
None, some, strong
Leisure, work, rush, morning, night
Personal use, gift, snack, fun, achievement
Home, work, friend’s home, in-store
Self, friends, boss, peer
Convenience, prestige, economy,
value-for-the-money
Combination of demographic and psychographic
characteristics
Young Suburbia, Blue-Blood Estates
Actualizer, fulfilled, believer, achiever, striver,
experiencer, maker, struggler
AIO MODEL FOR GILETTEIf Gillette decided to evaluate the target market for its successful Sensor razor in terms of psychographic characteristics, it might use the following statements to capture individual and family predispositions toward the Sensor razor system :Personal Statements :I’m a demanding person.For me, seeking perfection in what I do is really not important.When I wake up in the morning, my appearance is uppermost on my mind.When it comes to the way I dress, I’m not particularly fashion conscious.
Family Statements :“Good” grooming is important to all members of my family.Members of my family frequently comment about how good I look after I shave.We are more likely to try new products than most of our friends and neighbors.I imagine that we buy and use more grooming products than other people we know.
INFLUENCES ON LIFECYCLECulture and Society
Group and IndividualExpectations and Values
Market Reaction of Consumer
Lifestyle Patterns andValues
Purchase Decisions
AIO Inventories
Activities Interests Opinions Demographics-------------------------------------------------------------------------------------Work Family Themselves Age
Hobbies Home Social Education
Social events Job Politics Income
Vacation Community Business Occupation
Entertainment Recreation Economics Family size
Club member Fashion Education Geography
Community Food Products City Size
Shopping Media Future Lifecycle
Sports Achievements Cultural Dwelling
SRI’S Values and Lifestyle Segments
INTEGRATED
ACHIEVER
EXPERIMENTALEMULATOR
CAUTIOUSLY-CONSCIOUS
I-AM-ME
BELONGER
SUSTAINER
SURVIVOR
()O
UT
ER
DIR
EC
TE
D INN
ER
DIR
EC
TE
D
NE
ED
DR
IVE
N
Progressive Repositioning of an Existing Product
Core market
Original entry point
R1 First repositioningR2 Second repositioning
R1
R2
MARKET TARGETTINGIDENTIFICATION :
To divide the market into separate segments on the basis of a common need or characteristic that is relevant to the product or service,
marketers must be able to identify the relevant characteristic. Some
segmentation variables, such as geography (location) or demographics (age,gender, occupation, race), are relatively easy to identify or are even
observable. Others, such as education, income, or marital status, can be
determined through questionnaires. Still other characteristics, such as benefits sought or lifestyle, are more difficult to identify. A knowledge of consumer behavior is especially useful to marketers who employ s such intangible consumer characteristics as the basis for market
segmentation..
MARKET TARGETTINGSUFFICIENCY
For a market segment to be a worthwhile target, it must have a sufficient number of people to warrant tailoring a product or promotional campaign to its specific needs or interests. To estimate the size of each segment under consideration, marketers often use secondary demographic data, such as that provided by the United States Census Bureau (and available at most local libraries), or undertrake a probability survey whose findings can be projected to the total market.
MARKET TARGETTINGSTABILITY
Most marketers prefer to target consumer segments that are relatively stable
in terms of demographic and psychological factors and needs, and that are
likely to grow larger over time. They prefer to avoid “fickle” segment that
are unpredictable in embracing fads. For example, teenagers are a sizable
and easily identifiable market segment, eager to buy, able to spend, and easily reached. Yet by the time a marketer produces merchandise for a popular teenage fad, interest in it may have waned. The popularity
among teenagers of Batman Merchandise (T-shirts and caps) during the highly successful run of Batman I (the movie) was not repeated during Batman
II, when much of the tie-in promotional merchandise remained unsold.
MARKET TARGETTINGACCESSIBILITY
A fourth requirement for effective targeting is accessibility, which means that marketers must
be able to reach the market segments they wish to target in an economical way. Despite the wide availability of special-interest magazines and cable TV programs, marketers are constantly looking for new media that will enable them to reach their target markets with a minimum of waster circulation and competition. One innovative communications company has devised an advertiser’s dream : it created a cable television channel that provides a captive audience of junior and senior high school students daily with two minutes of commercials. Each school showing the 12-minute news and information report and two minutes of commercials receives $50,000 worth of free satellite dishes, television sets, and VCRs. The same company offers a set of six glossy magazines for display in doctors’ waiting rooms to 15,000 physicians who agree to cancel all but two other publications. Advertisers are offered a large captive audience and a pledge of exclusivity : all six magazines feature only one brand in any product category.
Principle Oriented
Fulfilleds
Believers
Actualizers
Achievers
Strivers
Strugglers
Experiencers
Makers
Status
Oriented Action Oriented
Abundant Resources
Minimal Resources
SRI VALS 2SEGMENTS
MARKET TARGETTING
ACTUALIZERS are successful, sophisticated, active, “take-charge” people with high self-esteem and abundant resources. They are interested in
growthand seek to develop, explore, and express themselves in a variety of ways--sometimes guided by principle, and sometimes by a desire to have an effect, to make a change. Image is important to Actualizers, not as evidence of status or power, but as an expression of taste, independence, and character. Actualizers are among the established and emerging leaders in business
andgovernment, yet they continue to seek challenges. They have a wide range
of interests, are concerned with social issues, and are open to change. Their lives are characterized by richness and diversity. Their possessions and recreation reflect a cultivated taste for the finer things in life.
MARKET TARGETTINGFULFILLEDS are mature, satisfied, comfortable, reflective people whovalue order, knowledge, and responsibility. Most are well educated, and in (or recently retired from ) professional occupations. They are well-
informedabout world and national events and are alert to opportunities to broaden
their knowledge. Content with their careers, families, and station in life, their leisure activities tend to center on their homes. Fulfilleds have a moderate respect for the status quo, institutions of authority, and social decorum, but are open-minded about new ideas and social change. Fulfilleds tend to
base their decisions on strongly held principles and consequently appear calm
and self-assured. Although their incomes allow them many choices, fulfilleds
are conservative, practical consumers; they are concerned about functionality, value, and durability in the products they buy.
MARKET TARGETTINGBELIEVERS are conservative, conventional people with concrete beliefs and strong attachments to traditional institutions : family, church, community, and the nation. Many Believers possess moral codes that are deeply rooted and literally interpreted. They
follow established routines, organized in large part around their homes, families, and the social
or religious organizations to which they belong. AS consumers, they are conservative and predictable, favoring American products and established brands. Their education,
income ,
and energy are modest bust sufficient to meet their needs.
ACHIEVERS are successful career and work-oriented people who like to --and generally
do--feel in control of their lives. They value structure, predictability, and stability over risk,
intimacy, and self-discovery. They are deeply committed to their work and their families. Work provides them with a sense of duty, material rewards, and prestige. Their social
lives reflect this focus and are structured around family, church, and business. Achievers live conventional lives, are politically conservative, and respect authority and the status quo.
Image is important to them. AS consumers , they favor established products and services that demonstrate their success to their peers.
MARKET TARGETTINGSTRIVERS seek motivation, self-definition, and approval from the worldaround them. They are striving to find a secure place in life. Unsure of themselves and
low on economic, social , and psychological resources, Strivers are deeply concerned about the opinions and approval of others. Money defines success for Strivers, who don’t have
enough of it, and often feel that life has given them a raw deal. Strivers are easily bored and
impulsive. Many of them seek to be stylish. They emulate those who have more impressive
possessions, but what they wish to obtain is generally beyond their reach.
EXPERIENCERS are young, vital, enthusiastic, impulsive, and rebellious. They seekvariety and excitement, savoring the new, the offbeat, and the risky. Still in the process of formulating life values and patterns of behavior, they quickly become enthusiastic about
new possibilities but are equally quick to cool. At this stage in their lives, they are politically uncommitted, uninformed, and highly ambivalent about what they believe. Experiencers combine an abstract disdain for conformity and authority with an outsider’s awe of others’ wealth, prestige, and power. Their energy finds an outlet in exercise, sports, outdoor
recreation, and social activities. Experiencers are avid consumers and spend much of their income on clothing, fast food, music movies, and video.
MARKET TARGETTINGMAKERS are practical people who have constructive skills and value self-sufficiency.
They live in a traditional context of family, practical work, and physical recreation, and have little interest in what lies outside that context. Makers experience the work by working on it -- building a house, raising children, fixing a car, or canning vegetables - and have sufficient
skill, income, and energy to carry out their projects successfully. Makers are politically
conservative, suspicious of new ideas, respectful of government authority and organized labor, but
resentful of government intrusion on individual rights. They are unimpressed by material possessions other than those with a practical or functional purpose (e.g., tools, pickup trucks, or fishing equipment).
STRUGGLERS’ lives are constricted. Chronically poor, ill-educated, low-skilled, without strong social bonds, aging, and concerned about their health, they are often despairing and passive. Because they are so limited, they show no evidence of a strong self-orientation, but are focused on meeting the urgent needs of the present moment. Their chief concerns are for security and safety. Strugglers are cautious consumers. They represent a very modest
market for most products and services, but are loyal to favorite brands.
Brand Personalities of Select Brands
BRAND SEX AGE OTHER CHARACTERISTICS---------------------------------------------------------------------------------------------------------------------LEVI’S M/F 15-40 Individualistic,lavish,smart,trendy, upper crust
LEE COOPER M/F 20-35 Individualistic,sporty,tough,risk taker, assertive
LEE M 20-30 Anti establishment, macho, wild, outdoors, aggressive
WRANGLER M 20-25 Single, well off, handsome, tough & tough, successful
FLYING M 15-25 Ambitious, innocent, confident, flirtatious, goodMACHINE natured
KILLER M 25-35 Reasonably well off, rough & rough, ‘bad guy’ semi-urban, unattractive to girls
MARKETING STRATEGY---------------------------------------------------------------------------------------------------------------------------BRAND MARKETING STRATEGY---------------------------------------------------------------------------------------------------------------------------LEVI’S Target product at a wide age band between 15 and 45; emphasise the
cult status of the brand around the world, price the product at a premiumto every brand.
LEE Position the jeans as an extension of the American Dream; sell throughshowrooms to maintain aura; price the product at the same level as topend competitors.
LEE COOPER Offer different fits to occupy comfort pattern; price product at the samelevel as top end competitors; draw associations from European lifestyle.
WRANGLER Target young urban buyers through customised communication; position the product to appeal to outdoor instincts; use the type generated by mega brands to push sales.
JORDACHE Position the product as high fashion weekend casual wear; use lifestyle advertising to create an aura of affluence; sell through exclusive counters at premium stores.
PEPE Position the product as the choice of the fashion conscious; offer different ranges for men and women separately; expand reach by selling through multi-brand outlets.
POSITIONING ACCORDING TO TREACY AND WIERSEMA
THIS IS BASED ON THE NOTION THAT IN EVERY MARKETTHERE IS A MIX OF THREE TYPES OF CUSTOMERS.SOME CUSTOMERS FAVOR THE FIRM THAT IS ADVAN-CING ON THE TECHNOLOGICAL FRONTIER (PRODUCTLEADERSHIP); OTHER CUSTOMERS WANT HIGHLYREALIABLE PERFORMANCE (OPERATIONAL EXCELLENCE),AND STILL OTHER WANT HIGH RESPONSIVENESS INMEETING THEIR INDIVIDUAL NEEDS (CUSTOMERINTIMACY).
1. BECOME THE BEST AT ONE OF THE THREE VALUEDISCIPLINES.
2. ACHIEVE AN ADEQUATE PERFORMANCE LEVEL IN THE OTHER TWO DISCIPLINES.
3. KEEP IMPROVING ONE’S SUPERIOR POSITION IN THE CHOSEN DISCIPLINE SO AS NOT TO LOSE OUT TO ACOMPETITOR.
4. KEEP BECOMING MORE ADEQUATE IN THE OTHERTWO DISCIPLINES, BECAUSE COMPETITORS KEEPRAISING CUSTOMERS’ EXPECTATIONS.
1. UNDERPOSITIONING: SOME COMPANIES DISCOVERTHAT BUYERS HAVE ONLY A VAGUE IDEA OF THEBRAND. THE BRAND IS SEEN AS JUST ANOTHER ENTRY IN A CROWDED MARKETPLACE. WHENPEPSI INTRODUCED ITS CLEAR CRYSTAL PEPSI IN 1993, CUSTOMERS WERE DISTINCTLY UNIMPRESSED.THEY DIDN’T SEE “CLARITY” AS AN IMPORTANT BENEFIT IN A SOFT DRINK.
2. OVERPOSITIONING: BUYERS MAY HAVE TOO NARROWAN IMAGE OF THE BRAND. THUS A CONSUMERMIGHT THINK THAT DIAMOND RINGS AT TIFFANYSTART AT$5000 WHEN IN FACT TIFFANY NOW OFFERSAFFORDABLE DIAMOND RINGS STARTING AT $1000.
3. CONFUSED POSITIONING: BUYERS MIGHT HAVE A CONFUSEDIMAGE OF THE BRAND RESULTING FROM THE COMPANY’SMAKING TOO MANY CLAIMS OR CHANGING THE BRAND’SPOSITIONING TOO FREQUENTLY. THIS WAS THE CASE WITHSTEPHEN JOB’S SLEEK AND POWERFUL NEXT DESKTOPCOMPUTER, WHICH WAS POSITIONED FIRST FOR STUDENTS,THEN FOR ENGINEERS, AND THEN FOR BUSINESSPEOPLE, ALLUNSUCCESSFULLY.
4. DOUBTFUL POSITIONING: BUYERS MAY FIND IT HARD TO BELIEVE THE BRAND CLAIMS IN VIEW OF THE PRODUCT’SFEATURES, PRICE, OR MANUFACTURER. WHEN GM’S CADI-LLAC DIVISION INTRODUCED THE CIMARRON, IT POSITIONED THE CAR AS A LUXURY COMPETITOR WITH BMW, MERCEDESAND AUDI. ALTHOUGH THE CAR FEATURED LEATHER SEATS,A LUGGAGE RACK, LOTS OF CHROME, AND A CADILLAC LOGOSTAMPED ON THE CHASIS, CUSTOMERS SAW IT AS A DOLLED-UP VERSION OF CHEVY’S CAVALIER AND OLDMOBILE’SFIRENZA. THE CAR WAS POSITIONED AS “MORE FOR MORE”: CUSTOMERS SAW IT AS “LESS FOR MORE.”
DIFFERENTIATION VARIABLES
PRODUCT SERVICES PERSONNEL CHANNEL IMAGE
FormFeaturesPerformanceConformanceDurabilityReliabilityRepairabilityStyleDesign
Ordering caseDeliveryInstallationCustomer trainingCustomer consultingMaintenance and repairMiscellaneous
CompetenceCourtesyCredibilityReliabilityResponsivenessCommunication
CoverageExpertiseperformance
SymbolsMediaAtmosphereEvents
WHY BUY ME IN PREFERENCE TO OTHERS?
•BRAND PROPOSITION :FUNCTIONAL REASONS TO BUY VS OTHERS (WHAT DO YOU DO BETTER)
•BRAND ATTRIBUTES RATIONAL REASONS TO BUY VS OTHERS (REASONS TO BELIEVE/ SUBSTANTIATORS)
•BRAND VALUES : EMOTIONAL REASONS TO BUY VS OTHERS (INNER & OUTER DIRECTED)
•BRAND PERSONALITY THE WAY THE BRAND SPEAKS AND BEHAVES
BRAND POSITIONING
POSITIONING /REPOSITIONING
.
....
. .. . ... ..
. POORCLEANSING POWER
GOOD
IMPACT ON FABRICS GENTLE
A
B
C
A’
FOR A DETEREGENT POWDER
HARSH
BRAND DIAGNOSIS
PHYSIQUE PERSONALITY
RELATIONSHIP CULTURE
CUSTOMERS CUSTOMERS REFLECTION SELF-PROJECTION
IDENTITY PRISM
BRAND DIAGNOSIS
LACOSTE
PHYSIQUE PERSONALITY
Discrete Without fancy
IndividualismAristocratismClassicism
Social conformityanddistinction
Neither hyperfemininenor hypermasculinetransgeneration
Belonging to a club
RELATIONSHIP CULTURE
CUSTOMERS CUSTOMERS REFLECTION SELF-PROJECTION
Quality shirtTennisGolfSportswearCrocodile
LACOSTE IDENTITY PRISM
BRAND DIAGNOSIS
IBM
Confident,square
All data processingsystems
Securityreassurance
Big business, , Ivy LeagueOrder and collectivenessEast coast, Wall Street
‘I am a pro’Those who taketheir business seriously
APPLE
Intelligent,creative,cool
Changing the organisationNew humanismCalifornia’s symbolicnew frontier
Self-enhancement
Young-minded,autonomous
Liberation,friendly
Microcomputerseasy access,all purposes