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MCS 2600 (65)
Chapter 3

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Department
Marketing and Consumer Studies
Course
MCS 2600
Professor
Lianne Foti
Semester
Winter

Description
Chapter 3 – Market Segmentation and Strategic Targeting Mass (undifferentiated) marketing –single standardized product is offered, with uniformed marketing strategy (agricultural products & very basic manufactured goods) Segmentation- process of dividing potential market into distinct subsets of consumers with a common need/characteristic & selecting one or more segments to target with specifically designed marketing mix -segmentation, targeting & positioning-key elements of marketing; enable producers to avoid competition by differentiating (price, styling, packaging, promotional appeal, method of distribution, level of service) To be an effective target, a segment should be: 1/ Identifiable - divide market into separate segments on the basis of common or shared needs/characteristics that are relevant to product/service -some segmentation variables are easy to identify (demographics) & others can be determined through questioning (education, income, occupation, marital status) or are difficult such as benefits sought (in a product/serviceor lifestyle 2/ Sizeable- segment must consist of enough consumers to make targeting it profitable -to measure segment size & profitability, marketers use secondary data & consumer surveys to estimate buyers spending power and buying propensity 3/Stable/Growing- prefer to target consumer segments that are relatively stable in terms of lifestyles and consumption patterns and likely to grow (avoid ‘fickle’ segments that are unpredictable) 4/ Accessible (reachable)- marketers must be able to reach market segment in an economical way 5/ Congruent with the marketer’s objectives & resources – not every company’s interested (or has means) to reach every market segment, even if the segment reaches the other criteria Bases for Market Segmentation: Hybrid segmentation- includes attributes from two or more of the four quadrants Consumer Rooted – stem from Consumption-Specific – stem from specific consumers physical, social, & products or buying situations psychological characteristics Facts- determined from direct Empirical Personal Features Usage and Purchase Behaviours questioning & categorized by -demographics( age, age cohorts, -usage rate single objective measure, marital status, family life cycle, -usage situation/occasion evidence based & can readily gender, income, education, -brand loyalty (behaviour component) be determined & categorized occupation, social class) -psychographics-factual behaviour (lifestyle, leisure along objective criterion -geographic location, address, & activities, hobbies, activities, interests and geodemographics opinions (AIOS)) Personality Lifestyles & Attitudes & Preferences Regarding the Product Cognitions - abstract, Sociocultural Values -benefits wanted -personality traits -level of involvement determined through complex questioning, constructs -lifestyles, psychographics, and -awareness of product alternatives measured have no single, VALS -brand loyalty – perceived commitment and level universal definition -sociocultural values and beliefs of relationship Demographic segmentation – (core of almost all segmentations)easiest, most logical way to classify people, can be measured more precisely than other segment bases, most cost-effective way to locate & reach specific segments (because most secondary data compiled about any population is based on demographics) -many consumption behaviours, attitudes, &media exposure patterns are directly related to demographics (ie. many products are gender specific, music preferences are related closely to one’s age) -age, gender, marital status, family life cycle, income, ethnicity, income, occupation, education, etc. ●Age- key factor in marketing Marketplace decision difficulty (MPDD) –typical of older, less educated females to make buying decisions -largest age segment is baby boomers (1946-1964) and spend over $1trillino annually ●Gender – many products/services are inherently designed for males or females ●Marital status- traditionally families have been a main focus of marketing ●Family life cycle – based on that many family’s pass th
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