CHAPTER 3.docx

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Marketing and Consumer Studies
MCS 2600
Karen A.Gough

CHAPTER 3 - CONSUMER BEHAVIOUR MARKET SEGMENTATIONAND STRATEGIC TARGETING • Market segmentation is the opposite of mass marketing • before the emergence of the marketing concept, the prevailing way of doing business was mass marketing WHAT IS MARKET SEGMENTATION NECESSARY? • Mass marketing would be a logical strategy if everyones strategy wassimilar • The majority of marketers cannotfollow an undifferentiated marketing approach • Segmentation, targeting, and positions enables producers to avoid head-on competition in the marketplace by differentiating their offerings on the basis of such features like price, styling, packing, promotional appeal, method of distribution, and level of service • Market segmentation, strategic targeting, and product positioning are the key elements of marketing most consumer goods CRITERIAFOR EFFECTIVE TARGETTING • Before describing how market segments are identified, we must point out that not every segment that can be identified is viable or profitable • To be an effective target, a market segment should be identifiable, sizeable, stable, accessible, and congruent with the marketers objectives and resources • IDENTIFIABLE o To divide the market in separate segments on the baiss of common or shared needs or characteristics that are relevant to the product or service, a marketer must be able to identify those characteristics • SIZEABLE o In order to be a viable market, a segment must consist of enough consumers to make targeting its profitable o Segment can be identifiable and stable but not be large enough to be profitable • STABLE o Many marketers prefer to target consumer segments that are relatively stable in trerms of lifestyles and consumption patterns and avoid fickle segments that are unpredictable • ACCESSIBLE o To be targeted, a segment must be accessible, which means that marketers must be able to reach that market segment in an economical way • CONGRUENT WITH THE COMPANYS OBJECTIVESAND RESOURCES BASES FOR SEGMENTATION • Segmentation strategy begins by selecting the bases representing the core attributes of a group of existing or potential customers • Asingle charachteristic is never used alone and that virtually all segmentation plans are in the forms of hybrid segmentation that includes attributes from two or more of the four quadrents • The four groupings stem from dividing consumers characteristics along two criteria: facts, and consumer rooted features • CONSUMER ROOTED SEGMENTATION BASES o Group includes two types of personal attributes: facts that are evidence based and cognitions which can mostly be determined through indirect tests o Ones social class is defined by computing an index based on three quantifiable variables o On the other hand, psychographics consist of activities, interests, andopinions o Demographic Segmentation: core of almost all segmentations is demographics, due to the following reasons: demographics are the easiest and most logical way to classify people, and demographics offer the most cost-effective way to locate and reach segment s  Gender  Marital Status  Age  Family life cycle  Income, education, and occupation o Geodemographic Segmentation: hybrid segmentation scheme based on the premise that people who live close to one another are likely to have similar financial means, tastes, preferences, lifestyles, and consumption habits o Personality Traits: people are unlikely to disclose their personality traits either because they are guarded or because they do not consciously recognize them o Sociocultural Values and Beliefs: sociological and antrhopological v
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