Market Segmentation

Market Segmentation

Three Phases of Marketing Strategy

l    Phase 1: Market Segmentation

l    Phase 2: Target Market and Marketing Mix Selection

l    Phase 3: Product/Brand Positioning

“Best” Customer Segmentation

Demographic Segmentation

l    Age

l    Sex

l    Marital Status

l    Income, Education, and Occupation

Age: Segmentation by Age Effects and Cohort Effects

l    Seven Life Development Stages

–    Provisional Adulthood

l   Pulling up roots

–    First Adulthood

l   Reaching out, Questions/questions, Mid-life explosion

–    Second Adulthood

l   Settling Down, Mellowing, Retirement

Marital Status

l    Households as a consuming unit

–    Singles

–    Divorced

–    Single parents

–    Dual-income married

Sociocultural Segmentation

l    Family Life Cycle

l    Social Class

l    Culture, Subculture, and Cross-Culture

Family Life Cycle

l    Phases a family goes through in their formation, growth, and final dissolution

–    Bachelorhood

–    Honeymooners

–    Parenthood

–    Post-parenthood

–    Dissolution

l    Explicit basis: marital status, family status

l    Implicit basis: age, income, employment

Use-Related Segmentation

l    Rate of Usage

–    Heavy vs. Light

l    Awareness Status

–    Aware vs. Unaware

l    Brand Loyalty

–    Brand Loyal vs. Brand Switchers

Usage-Situation Segmentation

l    Segmenting on the basis of special occasions or situations

l    Example Statements:

–    Whenever our son will graduate, we will take a pleasure trip to Hawaii.

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

–    I always buy my wife/girl friend flowers on Valentine’s Day.
Ad Designed to Spell Out
Rewards of Consumer Loyalty

Benefit Segmentation

l    Segmenting on the basis of the most important and meaningful benefit

–    Prudential – financial security

–    Iomega – data protection

–    Wheaties – good health

–    Eclipse – fresh breath
Ad Offering
Combined Benefits