This document discusses methods for segmenting and targeting consumer markets. It identifies several common ways to segment markets, including by demographics, user characteristics, purchase behaviors, geography, and psychographics. Market segmentation involves identifying groups of potential customers with shared traits and interests in a product. Advertisers then target specific segments by tailoring their messaging, media selection, and overall marketing strategy. The goal is to effectively promote products to the subsets of customers most likely to find them appealing and useful.

1. Segmentation & Targeting

2. Class Objectives Identify the various methods advertisers use to segment and aggregate consumer and business markets Discuss how target marketing affects an advertising strategy

3. First things first A product must have utility for consumers. The product must meet a need… or a perceived need (want).  Groceries  Botox  Home  Lamborghini Photo: stjoesfoodprogram.org Photo: turbocharger-turbochargers.com

4. Market Segmentation 1. Identify people with shared needs and characteristics

5. Market Segmentation 1. Identify people with shared needs and characteristics 2. Aggregate these groups into market segments according to their mutual interest in the product’s utility

6. Result: Targets Marketing for a product is aimed at a segment of the population, called the target market. Advertising is aimed at a group reached by the medium, called the target audience. Photo: en.wikipedia.org Photo: turbocharger-turbochargers.com

7. Types of Markets Two Types Business Consumer

8. BehavioristicSegmentation Segmenting according to purchase behavior. User-Status Variables Usage-Rate Variables Purchase Occasion Variables Benefits-Sought Variables

9. User Status Variables Researchers: Stefan & Tannenholz Tide photo: coupondad.net All photo: thedealdetector.com

10. User Status Variables This Crate and Barrel ad targets sole users and repertoire users

12. Medium users

15. Frequency of need

16. Fads

18. Benefits-Sought Variables What are the benefits of the product to the consumer? What is the symbolism of the brand to the consumer? Comfort Fashion, Status Photo: footedpajama.com

20. County size

21. Climate

22. City / SMSA size

23. DensityPhoto: http://www.eia.doe.gov/emeu/recs/census_map.html

24. Geographic Segmentation Photo: allmightyray.com Photo: www2.tbo.com

26. Age

27. Ethnicity

28. Education

29. Occupation

30. Income

31. Family status

32. Home ownershipOften combined with geo targeting for geodemographic segmentation. Senior Citizens Married Middle class African American College Educated Women 25-49 Hispanic Teens

33. Demographic Segmentation Demographic segmentation: Heavy usage patterns of various age groups Exhibit 4-4, page 101

34. Demographic Segmentation Ford targets urban African-Americans Ford targets middle-class men in their 30’s and 40’s

35. Demographic Segmentation E*TRADE Baby: Time out: http://www.youtube.com/watch?v=x0GsNhLt9Ds Singing baby: http://www.youtube.com/watch?v=KCs8gIMKBSo First class: http://www.youtube.com/watch?v=mDm6iKH38C0 Photo: lifeorganizers.com

36. Demographic Segmentation Charles Schwab: Broker’s kids: http://www.youtube.com/watch?v=qj2oqI8w1gA Bailout: http://www.youtube.com/watch?v=mFM-m31y5HY Retirement: http://www.youtube.com/watch?v=11w8sNO8J_8 Photo: badvertisements.blogspot.com

40. What do you notice about the background music?

41. What does the target consumer appear to value?

43. Finalizing the Target Levi’s

44. Target  Product Concept Product Price Place Promotion 1. Select a target market (markets) from the market segments identified 2. Use the 4Ps of the marketing mix to shape a product concept for the market

45. Fewer, more-concentratedbuyers Organizationalbuyingbehavior Complexity:Manufacturers, Resellers,Brand Partnerships B2B Market Segmentation Differencesfrom ConsumerMarkets

46. B2B Market Segmentation Complexity:Manufacturers, Resellers,Brand Partnerships Reseller/Retailer Manufacturer Brand Partnership Simeus Foods International Hardees logo: pitchengine.com Coca-Cola logo: premisemarketing.com

47. The North American Industry Classification System (NAICS) hierarchy and codes are used throughout North America. Census data about industries helps companies target their markets. B2B Market Segmentation

48. Impact of Targeting on Advertising Message Media Mix Kia Optima: http://www.youtube.com/watch?v=T7-q0eK8HL0 Kia Soul: http://www.youtube.com/watch?v=kfJnqbudMzs