ECON344 Chapter Notes - Chapter 6: Psychographic

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CHAPTER 6 Segmentation, Targeting, and Positioning
BU 352 Spring 2016
1. Have a clear strategy and objective, must be consistent with the current situation
2. Segment the market based on needs, wants, characteristics
Geographic: Continent/Country/Region/Climate etc.
Demographic: Age, gender, income, race, generation etc.
Behavioural: Benefits sought, usage rate, occasion
o Occasion = when they buy it
o Benefit = satisfying direct customer need
Psychographic: How they view themselves
o self-values = goals
o self-concept = image
o lifestyle = how we live
o VALS is a common system for determining psychographic category
Geodemographic: combination of geographic, demographic, and lifestyle
3. Evaluate Segment Attractiveness
Identifiable: who is the market, is it unique?
Reachable: can the market be reached, will they understand
Responsive: consistent and positive responses
Substantial/Profitable: needs to be large enough, growth potential
Seg Profit = (Seg. Size * Seg. Adopt % * Purchase Behaviour * Profit Margin) FC
4. Identify the ability to pursue target market, some strategies:
MassMarket: provides same benefit to everyone
Differentiated: target multiple with different offerings
Niche: one target and try to meet their needs
Micromaret: one-to-one customized products for individuals
5. Decide on a product position, the mental image a consumer has regarding your
value: price to quality
attributes: most important to target market
symbol: what does that brand mean
competition: head to head, differentiation
leadership: emphasize product leadership
For (target customer)
Who (statement of need)
The (product name) is a (product category)
That (statement of key benefit)
Unlike (competitor)
Our product (primary differentiation)
1. determine consumers perception of our product in relation to competitors
2. identify markets size and ideal points
3. identify competitors positions
4. determine consumer preferences
5. select the position
6. monitor the strategy
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