Segmentation, Targeting

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Segmentation, Targeting Positioning

• Ch. 7

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Global Market Segmentation

• Process of identifying and categorizing specific
  ________ of potential customers with __________
  attributes who are likely to exhibit ____________
  to a companys marketing mix
• Levitts Pluralization of Consumption Segment
  Simultaneity
• Consumers in different country markets
  increasingly seek variety and same new segments
  are likely to show up in different country
  markets
• Provides opportunity to pursue one or more
  segments worldwide on a global scale
• MTV in Asia, Europe, USA

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Basis of Global Segmentation

• Global market segmentation can be based on one or
  more of the following _________
• Demographics (income, pop, gender, etc.)
• Country?
• Psychographics (values, attitudes, lifestyles)
• Behavioral characteristics
• Benefits sought
• Ethnicity
• Environments (i.e., governmental regs)

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Demographics

• Income
• Populations
• Age distribution
• Gender
• Education
• Occupation

In particular, notice trends are there fewer
married couples, smaller family size, changing
roles of women, higher incomes, etc?
Do not assume homogeneity
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Demographic Segmentation

• _________ can provide insight to marketers who
  are scanning the globe for ____________
• In EU, no. of consumers lt/ 16 yrs is approaching
  number 60 yrs.
• Asia is home to 500M consumer lt/16yrs
• Americas 3 main ethnic groups-African Americans,
  Hispanic Americans, Asian Americans-represent a
  combined annual buying power of 1T.
• 28.4M foreign born people live in the US with a
  combined income of 233M

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Income segmentation

• For many industries (not all), the single most
  valuable and important indicator of market
  potential is ___________.
• A market consists of those that are _____ and
  _________to purchase a product
• Dont rely on GNP alone Income distribution
  issues.
• Purchasing power parity issues
• Way to determine if currency is undervalued or
  overvalued
• Big Mac Index Theoretically, the price of a Big
  Mac in any world currency should, after being
  converted to dollars, equal the price of a Big
  Mac in the US. If the converted price is higher
  than price in US, then currency is overvalued.

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Population segmentation

• For low price products, ________ is a more
  important variable in determining market
  __________
• 100 million Chinese consumers can afford to spend
  14 cents on a single-use pouch of shampoo
• McDonald Approx. 20 of revenue comes from 100
  non-major country markets
• Find a ________ to assess market size
• If TV ownership is the benchmark, find out the
  no. of people that own TV sets which may be
  100-125M people.

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Age Segmentation

• Global teens between ages
• 12 and 19 yrs share interest
• in fashion, music, and lifestyle
• Global _____ older, affluent consumers who are
  well traveled
• Luxury autos
• Beverages
• Financial services

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Psychographic segmentation

• Grouping people according to attitudes, value,
  and lifestyles
• Associated with SRI International and VALS 2
• www.sric-bi.com

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Psychographic segmentation

• Porsche example moved from demographic
  segmentation (40 yr old male, college grad,
  gt200K income) to psychographic after sales
  decline.
• ___________ divided buyers into 5 categories
• Top Guns (27) Ambition, power, control
• Elitists (24) Old money, car is just a car
• Proud Patrons (23) Car is reward for hard work
• Bon Vivants (17) Car is for excitement,
  adventure
• Fantasists (9) Car is form of escape
• We were selling to people whose profiles were
  diametrically opposed, that is, dont tell an
  elitist how good they look in the car!

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Global Psychographics

• BSBs Global Scan
• TARGET SCAN 5 global psychographic segments that
  represent 95 of adult populations in 18
  countries surveyed
• Strivers (26) young people, driven to achieve,
  median age of 31
• Achievers (22) successful, status-conscious
• Pressured (13) mostly women, lots of pressure
  and problems, cuts across age groups
• Adapters (18) older, content
• Traditionals (16) clings to past, heritage, and
  values

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Global Psychographics (cont.)

• DMBBs Euroconsumer Study
• (15-country study)
• Elite Consumers
• Successful Idealists (socially responsible
  ideals)
• Affluent Materialists (status-conscious)
• Mainstream Consumers
• Comfortable Belongers (Familiar)
• Disaffected Survivors (Little hope for upward
  mobility)

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Global Psychographics(cont.)

• YRs Cross-cultural Consumer Characterizations
  (4 Cs) Based on assumption that there are
  underlying psychological processes involved in
  human behavior that are ___________ and so basic
  that they can be found all over the globe.
• 20-country study
• Constrained
• Resigned Poor, Struggling Poor
• Middle Majority
• Mainstreamers, Aspirers, Succeeders
• Innovators
• Transitionals, Reformers

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Behavior Segmentation

• Categorize people in terms of usage ____ and user
  _________
• How much and how often they use it (heavy,
  medium, light, non-user)
• Whether or not people buy or use a product
  (potential users, non-users, regulars,
  first-timers, users of competitors products)
• Vodka in Russia
• Usage high, regular users
• Market for cheaper Russian vodka
• Imported vodka captures only 1 of Russian market

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Benefit Segmentation

• Benefit segmentation focuses on the ______
  equation
• Value Benefits / Price
• Based on understanding the problem a product
  solves, the benefit it offers, or the issue it
  addresses
• The convenience factor in a changing society
• Campbells Soup in Japan

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Ethnic segmentation

• Based on ___________ preferences.
• 3 main ethnic groups in US but can be further
  divided
• African Americans
• Haitian, Jamaican, African,
• Asian Americans
• Thais, Vietnamese, Chinese, Japanese,
• Hispanic
• Cuban, Mexican American, Puerto-Rican,
• Segment based on ethnicity
• Mexican retailers opening stores in US courting
  Hispanics.

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Targeting

• The process of evaluating and comparing segments
  then selecting one or more of them as the
  _________ with the highest potential.
• Create marketing mix that maximizes return on
  sales while maximizing value to consumers

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Criteria for Targeting 9 Ws

• After segmenting the market according to one or
  more of the variables described, ________ a
  product-market profile
• Who buys our product?
• Who does not buy it?
• What need or function does it serve?
• What are customers buying to satisfy the need for
  which our product is targeted?
• What price are they paying?
• When is the product purchased?
• Where is it purchased?
• Why is it purchased?

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Criteria for Targeting 9 Ws (cont)

• Each answer provides input into decisions
  concerning the 4Ps
• General rule If want to penetrate existing
  market, it must offer ____ value _____
  competitorsbetter benefits, lower prices, or
  both.
• Use following criteria for assessing opportunity
  in global target markets

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Criteria for Assessing Global Opportunity
Competition
Current Size of the Segment
Feasibility of successfully reaching designated
target
Compatibility with companys overall objectives,
its brand image, established sources of
competitive advantage
Anticipated Growth Potential
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Target Market Strategy

• __________ global marketing
• Mass marketing on a global scale
• Undifferentiated target marketing
• Revlon international and Shake Your Body campaign
• ____________ global marketing
• Niche marketing
• Single segment of global market
• Body Shop and natural beauty aids
• Global depth rather than National breadth
• ____________ global marketing
• Multi-segment targeting
• Two or more distinct markets
• Product versioning Unilevers Calvin Klein
  (luxury), Brut (mass market)

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Positioning

• Locating a brand in consumers minds over and
  against competitors in terms of _______ and
  _________ that the brand does and does not offer.
  Put differently, positioning is the process of
  developing strategies for staking out turf or
  filling a slot in the mind of target customers.
• Attribute or Benefit
• Volvo and safety
• Quality and Price
• Belvedere Vodka (Poland)
• Use or User
• Marlboro man
• Competition
• What others are not doing Body Shop
• Southwest Airlines

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Positioning Strategies

• Global consumer culture positioning (GCCP)
• Foreign consumer culture positioning (FCCP)
• Local consumer culture positioning (LCCP)

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Positioning Strategies (cont.)

• Global consumer culture positioning (GCCP)
• Identifies the brand as a symbol of a
  particular ____________ culture or segment
• Segment Example Global teens, cosmopolitan
  elites, globe-trotters laptop warriors
• Brand Example United Colors of Benetton
  (Brand concerned with unity of humankind), Sony
  My First Sony for youngsters around the world.

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Global consumer culture positioning (GCCP)

• Applicable to high tech, high touch products.
  Can be both.
• High tech -gtComputers, cellular phones, leisure
  and recreation products (Adidas, Canon)
• High touch -gtAppeal to senses more than
  intellect. Luxury perfume, designer fashion,
  fine champagne
• Both high tech and high touch (i.e., combination
  of performance and design)
• Cell phones, computers

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Positioning Strategies (cont.)

• Foreign consumer culture positioning
• Associates the brands users, use occasions, or
  product origins with a __________ country or
  culture
• Fosters Australian for Beer
• Haagen-Dazs (really launched
• by an American company)
• Harley Davidson (very American)

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Positioning Strategies (cont.)

• Local consumer culture positioning
• Associates the brand with ______ cultural
  meanings, reflects local cultures norms,
  portrays the brand as consumed by local people in
  the national culture or depicts the product as
  locally produced for local consumers.
• Budweisers US advertising highlighting
  Clydesdale horses which associates brand with
  small town American culture.

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Study Guide

• You must know all of Ch. 7, however I will not
  ask specific questions about all the different
  psychographic studies that have been done, i.e.
  SRI International, BSB, DMBB.