1. 2. Housekeeping: readings, team name & e-e-mail, etc. News 1. Surveillance data mining 2. Shopping basket analysis Segmentation marketing 1. Basics of segmentation 2. Geographics 3. Demographics 4. Lifecycle 5. Cohorts 6. Psychographics & behavior Team discussion questions 1. Profile yourself as consumer 2. Profile your customers: How does this enable you to respond to their needs better Next week: consumer behavior why we buy what we buy
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What more do you need to know? How could you find out?
What is
You might understand the parts, but might miss the whole chicken
Methods of Seg-men-ta-tion
Demographic/Geographic refers to age, sex, income, education, race, martial status, size of household, geographic location, size of city, and profession. Life stage refers to chronological benchmarking of people's lives at different ages (e.g., pre-teens, teenagers, empty-nesters, etc.). Lifestyle refers to the collective choice of hobbies, recreational pursuits, entertainment, vacations, and other non-work time pursuits Psychographics refers to personality and emotionally based behavior linked to purchase choices; for example, whether customers are risktakers or risk-avoiders, impulsive buyers, etc.
Belief and value systems includes religious, political, nationalistic, and cultural beliefs and values.
Behavior analysis includes what behaviors consumers actually engage in (after all is said and done)
Pitfalls of Segmentation
appeal to segments that are too small misread consumer similarities and differences become cost inefficient spin off too many imitations of their original products or brands become short-run rather than long-run oriented unable to use certain media (due to small segment size) compete in too many markets confuse people become locked in to a declining market too slow to seek innovation possibilities for new products
Demographic Profile
Business segmentation can help companies align their sales territories based on the opportunities on the ground. The BEFOREmap shows territories determine by geometryfour quadrants dividing the central area while the AFTERmap shows territories that vary in size based on the number and potential value of target businesses (the red dots indicating the locations of target businesses). By mapping its business prospects by size and industry type in Lexington, Kentucky, a company can better realign its sales territories based on the concentrations of its highquality prospects.
Demographic analysis Demographic data packs PRIZM market segments Prizm ZIP profile
Mosaic segments
A Affluent Suburbia 01 Very high-income, families with older children in suburban areas 02 Very high-income, large families in suburban areas 03 Very high-income, young, suburban families with children 04 Empty-nest, high-income, suburban couples 05 High-income, families with older children in suburban areas 06 Large, high-income families in major market suburbs 07 High-income families with children in suburbs 08 Suburban, high-income families with older children
In your discussion team: Describe yourself as a target market using the descriptors from the various methods of profiling we have covered. Given your description, how would a marketer most optimally contact and engage you?
Sample Profile
Cluster analysis
Cluster analysis builds hierarchical trees based on similarity among individuals compared across several dimensions of questions
Actualizers 9%
Principles
Status
Action
16%
13%
13%
Strugglers 12%
Forrester categorizes social computing behaviors into a ladder with six levels of participation; we use the term "Social Technographics" to describe analyzing a population according to its participation in these levels.
http://www.forrester.com/Groundswell/profile_tool.html
Segmentation of blog users by political party There is a persistent tendency for Democrats to participate more fully in social technologies. Looking at the index (all adults = 100), you can see that Democrats are at least 10% more likely to do just about anything involving social technologies. The Republicans are the opposite -- they're a lot LESS likely to participate
http://blogs.forrester.com/groundswell/2007/12/the-social-prof.html
Marketing resources are focused to better meet customers needs and deliver more value to them
Customer develop preference for brands that better meet their needs and deliver more value
Brand supplier loyalty leads to increased market share and creates a barrier to competition
Fewer marketing resources needed over time to maintain share due to brand or supplier loyalty
(see Meredith, G. E., Schewe, C. D., & Karlovich, J. (2001) Defining Markets, Defining Moments: America's 7 Generational Cohorts, Their Shared Experiences, and Why Businesses Should Care
Marketing Tip: Having lived through the Depression, this cohort prefers to
pay more for a smaller serving, rather than throw something away. As a result, single-serving products are now becoming popular. Maxwell House Filter Pack Singles, Pillsbury single-serve cakes, and Orville Redenbacher singleserve microwave popcorn are all examples.
Marketing Tip: You can reap major rewards by tying your product to health
and wellness values. Retailers can joint-venture with hospitals to offer on-site health seminars that have a direct nutritional link to providing health and wellness. Offering tips in newsletters on health and fitness is another way to enhance satisfaction. Financial institutions should consider designing financial instruments (like Christmas Club) that promote saving strictly for health, wellness and fitness purposes.
Marketing Tip: Because this cohort is very street smart when it comes to
advertising, oversold sales pitches full of hype will fall flat. They need to be spoken to in a way that says, Youre different. We respect that. Chryslers Neons Hi campaign, which showed the car with the simple message Hi written above it, was very effective with Xers mainly because it dropped all pretensions and talked directly to the customer in a non-threatening way.
Marketing Tip: This is the most diverse cohort of all. One third are from a
minority group compared to one fourth of the total population. In marketing to this group, reflect greater diversity in your ads. The Gap and Benetton have been particularly effective in mirroring diversity in their advertising. Even Ralph Laurens wasp-ish lines of clothing have embraced racial and ethnic diversity.
1. Who are political independents in Minnesota; How would you characterize them? 2. Given this description, how could each major political party appeal to them for the next election?
If you were going to gather information for segmenting beer drinkers, how would you go about it?
Using one or more of the profiling methods discussed, identify several of your target market segments for a business. Describe one in detail in a paragraph and be prepared to present in class.
Clinic Cynic: Generally distrustful of medical profession with poor adherence to treatment.
Suspicious of ads and their promises. Fairly involved in wellness. Responds to issues as they occur
Avoider: Refrains from using healthcare services. Does not participate in competitive sports or good nutrition. Shows the most healthy apathy. Moderately receptive to ads; dominated by males. Generic: Shops around to save healthcare dollars. Most likely to experiment with alternative
healthcare delivery. Active, information seeker, open to advertising. Adherence adversely affected by costs.
Family centered: Puts family health above all other health issues. Enjoys role as family health
decision maker. Moderate information seeker but attends to ads.
Traditionalist: Willing to pay more for quality healthcare. Can be very brand-driven. Easiest to
satisfy. High rates of chronic disease but underuse of Rx. Low receptivity to ads.
Loyalist: Moderation in all healthcare opinions and behaviors, and average interest in health
information, fitness and nutrition. Interested in saving money but will often pay more for care of better quality.
Ready User: Least likely to avoid healthcare services; undeterred by expense. Frequent use of Rx.
Good nutrition but rarely does heavy exercise. Attends to ads, although somewhat skeptical.
Independently Healthy: Active in exercise, sports, and good nutrition. Likely to try different
providers and healthcare alternatives. Looks for long-term benefits. Fairly involved in seeking healthcare information.
Naturalist: Propensity for nontraditional healthcare. Concerns with nutrition and staying active, but
not sports. Skeptical of ads & providers. Contrary opinions, high expectations, hard to satisfy.