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Lecture 7

MARK301 Lecture Notes - Lecture 7: Psychographic, Target Market, Marketing Mix


Department
Marketing
Course Code
MARK301
Professor
Utku Akkoc
Lecture
7

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Targeting and Segmenting
how did Howard make people happy? - instead of finding what is best on average, he found
what was good for a segment of people.
the consumers don't always know what they want
Market Segmentation
dividing the total market into smaller, distinct, relatively homogenous groups who respond
similarly to marketing strategies
no single marketing mix can satisfy everyone
use separate marketing mixes for different segments
embracing diversity (segmentation) = maximizing happiness for consumers
Segmenting, Targeting, Positioning
1. Segmentation - dividing a market into distinct groups with distinct needs, characteristics, or
behaviours who may require different products or marketing mixes
2. Targeting - evaluating each market segment’s attractiveness and choosing the segment(s) to
enter
3. Differentiating - making yourself different from other offerings to create superior customer
value
4. Positioning - creating a clear, distinctive, and desirable place for a product relative to
competitor in the minds of target customers
goal - build the right relationships with the right customers —> create value
Steps in Developing a Market Strategy
1. Segmentation - identify bases for segmentation, develop profiles of the segments
2. Target Marketing - evaluate attractiveness of segments, select the target markets
3. Positioning - identify and select a positioning strategy
The Segmentation Process
after you’ve segmented the market:
1. develop a profile for each segment
2. evaluate each segment
3. select specific market segment(s) = Target market(s)
Bases for Segmentation
geographic
demographics - gender, age, income
psychographics - likes, dislikes, attitudes, beliefs
behavioural/product usage - how regularly do they buy? returning customer?
Geographical Segmentation
dividing market into homogenous groups based on location or environment
does not ensure that all consumers in a location will make the same buying decision
useful for identifying general patterns
demand for goods and services can vary by region
most brands get 40-80% of sales from core regions
can segment by region, urban vs rural, climate, and density - downtown core vs. suburbs

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Demographic Segmentation
dividing consumer groups according to personal characteristics such as:
gender age family size family life cycle income
occupation education religion race generation
limitations - the average is not what everyone looks like
most popular approach because it is easy to measure
segmenting by gender works for many gender specific products
income (and social class) can be useful bases, but difficult to define precisely
identifies and targets the affluent for luxury goods
some manufacturers have different grades of products for different markets
Psychographic Segmentation
divides a population into groups with similar psychological characteristics - shared attitudes and
behaviours, personality, lifestyles
lifestyle - most common method for developing psychographic profiles is large-scale survey
psychographic profiles produce rich descriptions of potential target markets
greater detail aids in matching a company’s image and its offerings with the type of consumers
who are likely purchasers
e.g. Nike promoting a lifestyle - video
Behavioural Segmentation
dividing a consumer population into homogeneous groups based on their knowledge, attitude,
use, or respond to a product
purchase occasion - time of day, holiday
benefits people seek when they buy - e.g. bleaching vs. scented detergent
user status - nonuser, ex-user, potential-user, regular user
usage rates for a product - light, medium, heavy. segmenting according to amount of product
consumers buy and use
80/20 rule - about 80% of revenue is going to come from small loyal percentage which is
around 20% of customers. 20% of customers are going to make up abut 80% of products
purchases
loyalty toward a brand/product - completely, somewhat, not at all. segmenting according to the
strength of brand loyalty consumers feel toward a product
benefit-based segmentation
focuses on the attributes people seek in a good or service and the benefits that they expect to
receive
groups consumers into segments based in what they want a product to do for them
e.g. different detergents. downy makes clothes soft, gain makes clothes smell good, tide
brightens clothes.
Multiple Segmentation Bases
using multiple segmentation bases can increase accuracy in reaching the right decisions
combine multiple bases
e.g. geographic and demographic
e.g. product-related with income and expenditure patterns
Multiple Ways to Segment
there are many ways to segment a market, but some are better than others
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