Market segmentation can be defined as the action in which manager divide the market into small group for the purposes of using the right marketing strategies or mixes.

Whenever talking about market segmentation, there are three main categories to discuss: segmenting consumer market, segmenting business market and segmenting international market.

- Segmenting consumer market falls into another four main categories:o Geographic segmentation divide the market into segments based on

variables such as nations, cities, climate, weather, neighborhood…for example, by successfully segmenting automobile market in Vietnam, Mazda spend more budget for advertising Mazda BT50, a pickup car in the central of this country because of hill terrain. Another illustration is that in order to save cost, many automobiles manufacturers do not install heating seat in some tropical countries.

o Demographic segmentation divide the market into many small segment based on customers’ ages, occupation, gender, income, family life cycle, generation, education. This seems to be the most basic segmentation the marketers should always take into consideration as firstly customers need and behaviours closely relate to their demography and furthermore these elements can be measured with less efforts. For instance, it is clear that there are the difference in car choice between occupations in Vietnam: businessman usually use a sedan, architect use pickup to serve their job.

o Psychographic segmentation divide the customers into many units such as social class, lifestyle and personality. For instance aldi, marks and spencer.

o Behavioural segmentation divide the market based on varibales such as occasion, benefit sought, user status, usage rate, loyalty (if there are choices between product, the company can learn about their competitors, if the custoemrs turn away from the product, the company will know their weakness)

- What should know?: segmentation should be o Measurable: segment size, purchasing power and customer profiles can

be measuredo Accessible: customers can be reached and servedo Substantial: segment should be large and profitable to serve.o Differentiate: segment should be differential conceptually distinguishable

and response differently to different marketing mixo Actionable: effective program can be designed for attracting and serving

the segment

Critique:

- Wright (1996): customers belong to more than one segmentation.

- Hoek (1993): Segmenting customer in one segment is technically appropriate but It is conceptually and practically questionable

- Consumers buy and use the product situationally and not related to personality or demography.

- The supporter assumes segmentation is static and stable, but they change over times, furthermore I is a complexity of behavior. Many customers can’t even describe their personality

- Some specific products are marketed by the retailers and consumers are affected by retailer instead of their decision

- Craft (2004) For small business, it costs lots- Most techniques of segmentation rely on descriptive factors and are not

effectively predict the future buying behavior of customers

Technology: it is not segmenting customers traditionally in term of geography, behavour, demography and psychography that would attract more customers. Today’s marketing also concern about how long customers stay in the retailers’ site and how many clicks they have made on the site regardless where they come from.

- Paul Fennemore (2012): it is no more important to classify customers into demographic segmentation but instead, customers are more influential by bloggers.... Therefore group customers into age, income…are not a great way to relate to customers. Demographics cannot be used to determine whether customer buy online or offline but the attitude toward technology is the key. It is not their age to determine the type of product they buy but instead their age to know their usage rate of the internet and how they believe in purchasing online. The type of modeils decice will be demogrphhic, the operation system, email….

- Paul Fennemore (2012): Psychographic segmentation can be easier for marketer to get a deep insight of customers. Can even track customers’ interest, opinions and interests. Can see group that share same interest in social media, but problem is that if marketers directly ads about the product, customers will not accept.

- Straus (2009), Geographic segmentation in terms of locations, nations, cities…is no more important. Instead, as internet is greatly used by consumers, transaction between customers and product providers can be made by just a couple of clicks. Therefore in this case, delivery method or distribution strategy is the most driving forces behind geographic segmentation. Infrastructure as well as language spoken are the variables.

- Straus (2009) Behaviour segments: benefits sought can be defined easily based on type of webpage and online activities. Use online membership to track behavior of customer. See what customers tend to do next after visiting the site of company. Use example of cookies. Remind customers searched products and email to customers, but sometimes customers have just bought it but the company keep sending reminding

Shannon and Weaver model

Introduction:

- Shannon and Weaver (1949) are engineers developing telephone cables and radio waves, the model they developed was intended for mathematical theory of communication then it was widely accepted by many researchers at that times. This model was also known as the “mother of all model”. It was later further developed by several theorists to produce many extension of communication model (Berlo, Barnlund, Shramm…). Communication model of Shannon and Weaver is seen as below

Sender: The person who wishes to communicate the message. He or she makes up the message and the way it is communicated.

Encoder: This is the way the message is changed into signals, for example sound waves. This is done by the sender when transmitting the message. It can also be, for example, the language used when speaking, or the grammar used when writing. In this case, since the model was made up for technical communication, and example of encoding could be when the voice over the telephone gets coded into wave and transmitted through cables

Decoder: Decoding is done by the receiver when he gets the message. He has to decode the message that was coded by the receiver in order to be able to understand it.

Receiver: The recipient of the message from the sender. He usually gives feedback to the sender in order to make sure that the message was properly received.

Noise: The message is transferred through a channel, which can be interrupted by external noise. This in turn could result in the receiver getting an inaccurate

message. This is why feedback from the receiver is important in case the message is not properly received. Furthermore, the noise can also affect the decoding of the message by the receiver.

Feedback: This is when the receiver asks for clarifications from the sender. Feedback is important in order to make sure that the message has been well received.

Critque:Strength

- The communication model has the characteristics of simplicity and the concept of noise is effectively illustrated. By eliminating noise, the communication will be more effective.

- The model is generality therefore it is called the mother of all model.- Quantifiability

Weakness- Misinterpretation of the nature of human communication: By using transmitter,

people insert feeling and thought into the words (Reddy, 1979). Communication does not only contain words, it contain body language (55%, Allan Peace)

- The model is linear, that is the sender play primary role while receiver plays secondary role. Actual communication is not one way process

- Does not apply to mass audience communication- Power relation: kids are to be seen, not to be heard- Different interpretation: when talk to a frienddifferent from talk with a professor

with the same topic.

Schramm model Mass Communication Later used for IMC

Not one way any more but more ways:

- Company to customers- Customers to customers- Customers to company’s stakeholders

When convert to social media, the model become more complex

- Explain variables to affect the process- Examples of how a new TVC of Peugeot VN was made and how customer react

Uses in social media (this will connect social media and the model)

- Senders: the representatives of an organization- Encode: the signals used in communication over social media, e.g. words, videos

images, or audio.- Channel: Facebook, twitters…

- Decode: the receivers will decode what they have seen or heard into their own thoughts

- Receiver: the person who see or hear the message.

Evaluate

- Advantageo Effectively deliver the message of the company to the mass audience.

Can demonstrate with lively image and videoso Easy to convert the thought into lively message with cheap and use less

resourceso Variety of channel to chooseo Noise can be controlled (but not 100%)o Response instantly to customerso Customers can easily findo can boost visit to site (Chaffey)

- Disadvantageo Do not know if the customer perceive what the message was meant to beo Problem with the conversion of the message:

The message is not effectively internally communicated The representatives as the senders might misunderstand the

perception of the BOD, therefore misdeliver the message The ability to convert the thought into media

o The function of social media reflect the same as the communication model, however even though there it is possible feedback, customers do not always give feedback.

o Feedback of customers are not correct: example of “like” on facebook and their thinking outside. Take example of Peugeot first introduce the RCZ.

Message: Powerful and unique cars A small survey of 20 first people who likes was given to customers,

they confessed that they like because the car is new in VN and most importantly they like because they just want to press like.

o Noise: most important noise is the influence of other customers review. This is the problem with using social media for communication. It is ok if the communication is ok, but if it is not ok, it would be disaster.

o Channel: choose wrong channel: e.g fertilizer advertising on FB

Some industry works, some do not work with social media

In order to let customer know your positioning, beside convincing customers with products, (Chaffey) Can use social media as one of the online communication tools to position products/ service + example of Tesco uses cookies and make ads (lower price than Morrison, Saint Burry). According to Baines (2008), positioning contain

- Functional + example of automobile VN, how it use social media to position their product and service, try to relate with the communication model

Product features

Price

Quality

Use

- Expressive + examples of automobile VN

User

Benefits

Heritage

Example of bad communication model desatisfy customer: Peugeot do not response to customer properly [online] they blame this to press