Tuesday, October 29, 2013
• Dig into large groups of consumers
• Segments become pr/advertiser's core audience.
Segmentation for adv/pr
• Audience segmentation: is the process of identifying a marketer's "best prospects" on
the basis of:
1. Identifiable needs, problems or value
• Find the underlying problems or value system
Ex. Fed Ex - did some research and they found customers who:
• Need overnight service
• Problem w/late deliveries.
• Value reliability
1. Accessibility through media
• Accessible through media at reasonable cost.
Super Bowl: 30 ad cost 2.5 million
• Viewers: 78 million
• Cost per thousand: $32.00
• Internet Ad: cpm average $5.29
Profit potential for segment
• Most important test of a segment
• Least often applied in practice.
• Is the segment responsive to communications?
• Is it growing?
Product categories that are growing:
• Green products
• Car Sharing (smart cars)
• Long-term health care
Market Segments that are growing:
• Single women home buyers (women in the workforce
making lots of money)
• Spanish speaking segment on web
Segmentation is Niche Market
• Process of identifying a needs-segment and targeting a product for that segment.
o How can we segment our class?
• Left handed
Stores named: Anything Left Handed and Southpaw Shoppe
• Made Simple:
o We probe to find or create new segments • HP: Found consumers interested in value and quality hardware at a
slightly higher price
• Dell: same features, cut prices by selling direct to consumers through
advertising instead of retailers.
o Laundry Soap
•Segmentation evolved from:
o Mass Market: model sees everybody as a potential customer and tries to reach
the widest possible audience for a product.
o Target Marketing: Smaller slice of consumers from the "mass market" who
share the need for a product
• What helped was the ability to segment based on media choices
• One of the first examples of target marketing was done with kids on cable
o One-to-one model: two-way dialogues with customers and prospects.
• Brand image advertising created liking and preference
• Database went directly to consumer
Segmentation process Today:
•Step 1: Define the promotion uses for segmentation
o Marketing to Existing Customers
• Most profitable segment
• 65% of the average company's business comes from current satisfied
• Cost 4-5 times more get new customers than keep existing ones.
• How do you get your customers to use more of your product?
Offer rewards: use more of the product
Ex) L.L. Bean: brought out a line of kids clothes. They had older
men and women shopping, why not bring a new market and make current
customers (parents) spend more. (in this case, spend on their kids)
Ex 2) Arm and Hammer Baking Soda: found other ways to use
product (brush your teeth, eliminate refrigerator odors, dump product
down the drain and eliminate drain odors)
Seeking new consumers:
• Analyzing Trends
Brain Reserve and Trend Watching: NY based marketing
consulting firms that specialize in trends
• Past consumer trends:
• "Cocooning" the need to protect oneself from the
harsh outside world.
• "Cashing out" working men and women opting for
simpler, stress-free lives. • "Pleasure Revenge" predicted new fondness for
meats, desserts, other comfort foods.
• Trends for 2013
• Buy Local
• The Mobile Device as Everything
• Pemiumization: making high end products for
• Bling H2O: Limited edition, corked frosted
glass bottles. "You can tell a lot about a person by the
bottled water they carry."
• Tasmanian Rain: captured in Australia --
• Carlsberg 900 beer: Cost the same as
• Revona Black: Fashionable toilet paper:
$3.00 a roll
• Improving Media Choices
• Oxygen - young moms
• BET - Higher income black viewers
• ESPN - Men
Creating Sharper Messages
• Use segmentation to find out what their best prospects will
• Knowing prospect's need/attitude gives creates ability to
connect to personnel
• Step 2: Use geographic, demographic and psychographic variables to create segments;
o Identify the best existing customers
• What makes them alike?
• What makes them different?
• What consumer traits are associated with using/liking product?
• Which media people who like product attend to?
• Sorts of appeals they're likely to respond to?
o Segmentation Variables
• Geographic information: identifies the scope of a market as global,
international national, or local.
• Global Youth Market
• Global Affluent Market