Lecture 6 Segmentation Flashcards
What is an issue with appealing to buyers?
It is not possible to appeal to all buyers in the market place, at least not in the same way
This is because there are so many different buyers
What must companies identify when they are wanting to market a product?
The parts of the market they can serve best and most profitably
What sort of strategies should marketers design?
The strategies should be customer driven and build relationships with the right customers
What is target marketing?
Identifying market segments, selecting one or more of them and delivering products and marketing communications tailored to them
What is the total market divided into?
It is divided into segments
What can companies do through marketing segmentation?
Divide large, diverse markets into smaller segments that can be reached more efficiently and effectively with products and services that match their needs.
How can the best way to segment the market be found?
There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combinations to find the best way
What are the 4 key areas of segmentation variable?
Demographics
Geographics
Psychographics
Behavioural
What variables are encompassed by demographics?
Age Gender Income Education Social status Family Life stage Occupation Religion Socio-economic status
What variables are encompassed in geographics?
Country City Density Language Climate Area Population
What variables are encompassed in psychographics?
Lifestyle AIO Concerns Personality Values Attitudes
What is AIO?
Activity
Interest
Opinion
What variables are encompassed in behaviour?
Benefits sought Purchase usage Intent Occasion Buyer stage User status Life cycle stage Engagement
What does geographic segmentation involve?
Dividing a market into different geographical units such as nations, states, cities etc.
Either local, national or international
What is important to understand about different regions?
They have differences
What is one way in which different geographic units can be targeted?
By product type
What might a company decide to do once it has carried out geographic segmentation?
The company may decide to operate in one or a few of these areas or all of them but paying attention to geographical differences in needs and wants
How do many companies fit the needs of different geographic units?
By localising their products, services and promotions to fit the needs of different geographical units.
Give an example of a company that has localised to fit the needs of different geographic units?
Tesco’s and Tesco Express
Based on geography and location
Different products and store size
What is Macy’s strategy called?
MyMacy Strategy and it has 69 geographical districts
What is the most popular basis for segmenting customer groups?
Demographic segmentation
What varies closely with demographics?
Generally speaking customer needs, wants and usage rates vary closely with demographics
What is a benefit of demographics over the other 3 main segmentation areas?
They are easy to measure
What will marketers always need to know about their target market?
Its demographic make up
Give an example of a company that has looked at age and lifecycle when designing products
Cadbury’s
Freddo for kids
Dairy Milk
Milk Tray for the older populations
What is one problem with demographics?
Stereotyping
What can be a poor predictor of?
Age can be a poor predictor of what stage in the life cycle people are at
What has gender often been used in?
Beauty, clothing, toys and magazines
Why is gender under scrutiny?
Because of how we now define gender and how we refer to it
What sort of group do marketers often target in terms of income?
Many companies target more affluent consumers with luxury goods and services
What is a marketing strategy for those with a higher income?
Higher touch marketing strategy
What combination can location sometimes be?
Geographical segmentation and income segmentation coming together
What should be avoided when looking at age and income?
Unconscious bias
What does psychographic segmentation involve?
Dividing the market into different segments based on lifestyle or personality characteristics
What type of segmentation is difficult to do?
Psychographic
What approach is needed when carrying out psychographic segmentation?
A multi level approach is needed
Why do people buy products?
To reflect their lifestyles
What makes people act a certain way?
Their attitudes and beliefs
What does behavioural segmentation involve?
Dividing a market into segments based on consumer knowledge, attitudes, uses of a product or responses to a product
What are two important factors in psychographics?
Self esteem and self image
What is considered the best starting point for marketing segmentation?
Behavioural segmentation
What has facilitated marketers’ knowledge of customers?
Digital technology
What is meant by occasion in terms of behavioural segmentation?
Some products or services are seen as being appropriate for a particular occasion. Such products would be very useful during that particular occasion and would otherwise be irrelevant
What are the 3 main types of occasion?
Universal
Regular
Rare
Give an example of a rare occasion
A wedding
Give an example of a regular occasion
A birthday
Give an example of a universal occasion
World Cup
Easter
What is meant by benefits needed in terms of behavioural segmentation?
Grouping based on the benefits that customers seek from the product of service
How does segmentation according to benefits needed work?
Need to find the major benefits, the kinds of people who look for them and the brands that deliver them
What is Haley’s definition of benefits needed?
Provide customers with what they want based on the benefits they derive from use (Haley, 1968)
What are the two types of benefit?
Irrational and rational
What is an example of behavioural segmentation?
Fitbit
What did Morrissey and Baines (2011) do?
They segmented the Irish youth participation market depending on the benefits young people sought in sport participation: The enthusiast The reluctant exerciser The healthy looker The social competitor
What is meant by loyalty status in terms of behavioural segmentation?
Consumers can be loyal to a brand and can be divided into groups according to their degree of loyalty
What can loyalty depend on>
The product or service
Why are highly loyal customers assets?
They can do your marketing for you
Do customers have to be loyal to just one brand?
No, they can be loyal to a few brands (but not all)
What are 3 groups of loyalty?
Devotees
Brand communities
Brand cults
What are multiple segmentation bases used for?
They are used to identify smaller, better defined target groups
Why is segmentation important?
It helps us to better understand customers, reach them more efficiently through tailored offerings and communication
What 5 things should marketing segments be?
Measurable Accessible Substantial Differential Actionable
Give an example of a company that segments markets for other companies at a cost
ACORN
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