Understanding Segmenting and Targeting in Consumer Markets
This overview differentiates segmenting from targeting in consumer markets. Segmenting involves grouping customers based on shared characteristics, needs, and desires, while targeting focuses on prioritizing the most profitable segments for pursuit. The discussion includes demographic, behavioral, and psychographic segmentation techniques, emphasizing the importance of brand users and competitor users. Strategies like comparative advertising and benefits sought are explored, along with practical examples from various industries, such as airlines. Lastly, the segmentation challenge illustrates how to leverage initial consumer interest.
Understanding Segmenting and Targeting in Consumer Markets
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Presentation Transcript
Segmenting Consumer Markets MKT 3850 Dr. Don Roy
Segmenting and Targeting: What’s the Difference? • Segmenting is grouping customers according to common characteristics, needs, wants, and/or desires. • Targeting is analyzing, evaluating, and prioritizing those market segments deemed most profitable to pursue. • TARGETING FOLLOWS SEGMENTING
Demographics Age Income Ethnicity Education Gender Family Life Cycle
Behavioristic Segmentation • Brand Users - Recognizes profitability of loyal customers; Tactics: • Suggest additional uses for a product • Encourage increased consumption • Provides opportunities for cross-selling and up-selling.
Behavioristic Segmentation • Competitors’ Users - Often utilizes comparative advertising; a somewhat risky strategy Examples: Apple has used against Microsoft (Mac vs. PC campaign); Comcast uses it (against satellite TV providers).
Behavioristic Segmentation • Benefits Sought - Appeal to segments that value a particular benefit from consumption. Example- Airline industry: • Low price (Southwest Airlines) • Most destinations (Delta) • In-flight entertainment (Jet Blue)
Psychographic Segmentation • Grouping consumers on the basis of similar: • Values • Personalities • Lifestyles (e.g. Hobbies, entertainment, vacations)
Segmenting Consumer Markets • Demographics • Behaviors • Psychographics
Segmentation Creates Focus • Man • 18-25 • Middle Tennessee area • Has job or career goal • Good sense of humor • Likes country music • Enjoys going to movies • Non-smoker
Segmentation Challenge: What’s Old is New • High Roller is “adult size Big Wheel” • Price = $599.99 • First run of 300 sold out Challenge: Propose segmentation variables High Roller should use to build on the initial positive response
