Learning Objectives1. To Understand Why Market Segmentation Is

Essential.2. To Understand the Criteria for Targeting

Selected Segments Effectively.3. To Understand the Bases for Segmenting

Consumers.4. To Understand How Segmentation and

Strategic Targeting Are Carried Out.

What Kind ofConsumer Does This Ad Target?

This Ad Targets youth Who Are Physically Active People and Also Relish the bisexual interactions.

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Chapter Three Slide

Which Distinct Benefit Does Each of the Two Brands Shown in This Figure Deliver?

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Chapter Three Slide

The Idea Ad’s Benefit is use it in many ways and the Vodafone Ad is we are there for you, we customize

Why Segmentation is NecessaryConsumer needs

differsDifferentiation helps

products competeSegmentation helps

identify media

Bases for Segmentation

Consumer-Rooted Segmentation Bases

Demographic Segmentation

Geodemographic SegmentationBased on geography and demographicsPeople who live close to one another are

similar“Birds of a feather flock together”

Personality TraitsPeople often do not identify these traits

because they are guarded or not consciously recognized

Consumer innovatorsOpen mindedPerceive less risk in trying new things

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Chapter Three Slide

LifestylesPsychographicsIncludes activities,

interests, and opinions

They explain buyer’s purchase decisions and choices

VALS – Figure 3.4

Socio-Cultural Values and BeliefsSociological = groupAnthropological = culturalInclude segments based on

Cultural valuesSub-cultural membershipCross-cultural affiliations

Consumption-Specific Segmentation Bases

Consumption-Specific SegmentationUsage-Behavior Usage rate

Awareness statusLevel of involvement

Consumption-Specific SegmentationUsage-Behavior Usage-situation segmentation

Segmenting on the basis of special occasions or situations

Example : When I’m away on business, I try to stay at a suites hotel.

Benefits SegmentationBenefits sought represent consumer needsImportant for positioningBenefits of media

Brand Loyalty and Relationships• Brand loyalty includes:

– Behavior– Attitude

• Frequency award programs are popular• Customer relationships can be active or passive• Retail customers seek:

– Personal connections vs. functional features• Banking customers seek:

– Special treatment– Confidence benefits– Social benefits