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Chapter

COMM 296 Chapter Notes -Profit Margin, Snapple


Department
Commerce
Course Code
COMM 296
Professor
Tamar Milne

Page:
of 10
Audrey Yen
Feb 2-3, 11
Comm 296
Marketing
Chapter 8: Segmentation, Targeting and Positioning (STP Analysis)
Careful, when you market, don’t mix signals/segments. Or else you send two
messages (ex. Gap and Banana Republic same company. Two brand names
to not mix segments/signals)
STP Analysis Process
Step 1 : Segmentation: Strategy or Objectives
Articulate the vision/objective + find a strategy to fit that vision
Ex. Coke wants to increase sales in mature industry
Step 2 : Describe Segments
EACH SEGMENTATION BASE HAS MANY SEGMENTATION VARIABLES**
Helps understand profile of customer in each segment
Ex. Pop marketers break segments into:
1. Caffeinated or decaffeinated
2. Regular or diet
3. Cola vs. other
Can use multiple segmentation methods at once
1. Ex. Identifying segment in geography, and then seeing lifestyle choices
How to Describe Market Segments BASES (4)
1. Geographic
More practical, powerful and meaningful. Most important to
define
Continent
Within US: Pacific, mountain, central, south, mid-Atlantic,
northeast
THESE ARE SEGMENTATION VARIABLES FOR THIS
SEGMENTATION BASE.
Can create variables by urban vs. rural, topography,
countries, etc.
Organized based on where they live
Appropriate for products which satisfy needs that vary by region
Better to market needs to smaller geographic groups
everywhere
Ex. Safeway everywhere, but will differ in product selling
depending on where.
2. Demographic
Age, gender (the psychological difference depending on gender..
which is psychographic..? ), income (straddles the line between
demographic and geographic), religion, ethnicity, marriage,
occupation, household size, education, family stage, marital
status etc., sexual orientation
Lots can straddle lines
Ex. Want to market froot loops cereal to kids, air television ads
Saturday morning
Ex. Men channel surf. Watch prime time shows often if action or
attractive. Women watch shows that can personal relate to.
THEREFORE. Decide when to show tv ad
Not always useful (ex. Sportsclothes) careful.
SURPRISING EXAMPLE: took NFL and launched campaign for
females (clothing line and spa items). Based on gender
demographic, but segmenting In a different way
Geodemographic (prof groups under geographic and
demographic. Don’t need new section)
Urban, exurban, established, sophisticated townhouses,
bohemians, affluent retirees
Combination of geographic, demographic and lifestyle
characteristics
Ex. Consumers buy same types of cars in one area
Help determine what the ‘best’ location is
PRIZM: Potential Rating Index (by Zip Market)
Groups individuals in the US by:
Income
Home value
Occupation
Education
Household type
Age
Lifestyle variables
Note: finding ties between demographics (more income =
more education) can be a shortcut, but not always hand in
hand
Note: Can argue for different bases depending on the
situation and argument
3. Psychographic (powerful)
May be difficult to target with traditional market research (ex.
Not accurate to say there is healthy lifestyle by counting those
running on the seawall. But way to try).
Ex. National pride
Segment on how they see themselves, or want to be
Heads and hearts
Innovators, thinkers, achievers, experiencers, believers, strivers,
makers, survivors
Buys products to fit in with a certain ideology/group/idea of
oneself.
Ex. Believes oneself is a thinker buys more books
3 elements of psychographic makeup
Self values – goals for life + drive how lives life
ex. Need for self respect
motivates to develop self-image of way of life they
want
Self-concept – image people have ideally for themselves
Wants to seem fun loving? buy things for playing
group activities
Lifestyles – way one lives
How one sees oneself in the context of an end goal
Psychographic Tool: VALS
Classifies 8 segments of consumers depending on
questionnaire online
Framework indicates level of resources
Income
Education
Health
Energy
Degree of innovativeness
Upper = more resources and more innovative
Horizontally = motives for buying (primarily in US)
Ideals = knowledge + principles
Achievement = products and services that show success
Self-expression = desire social/physical activity variety
and risk
Helps identify segment and what motivates them
Connects psychology + lifestyle choices
Better than demographics because may share
demographic, but very different psychologically
Expensive