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Consumer Psychology (PSY - 514)

Lesson17

MARKET SEGMENTATION

IMPLEMENTING SEGMENTATION STRATEGIES

ENVIRONMENTAL INFLUENCES

CULTURE

1. Criteria for Effective Targeting of Market Segments

To be an effective target market a segment should be:

Identifiable

Sufficient (in terms of size)

Stable or growing

Accessible in terms of both media and cost

To divide the market into separate segments on the basis of common or shared needs or characteristics that are

relevant to the product or service, a marketer must be able to identify the relevant characteristics. Variables such as

Geography (location) and Demography (age, gender, occupation, race) are easy to identify. Education, income and

marital status can be known through questionnaires. Other characteristics such as benefits sought and lifestyles are

more difficult to identify

Most marketers prefer to target segments that are relatively stable in terms of demographic and psychological

factors and are likely to grow larger over time. Teenagers are sizable and easily identifiable market, eager to buy,

able to spend and easily reachable, yet when a marketer produces merchandise for a popular teenage fad, interest in

it may have waned

2. Implementing Segmentation Strategies

Once an organization has identified it most promising segments it must decide whether to target one segment or

several segments.

Each targeted segment receives a specially designed marketing mix i.e. a specially tailored product, price,

distribution network and/or promotional campaign

Segmentation Implementing Strategies

Differentiated Marketing

Concentrated Marketing

Targeting several segments

Targeting just one segment

Differentiated Marketing is highly appropriate for:

Financially strong companies

Well established in a product category

Competitive with other firms that are also strong in the category (soft drinks, automobiles or detergents)

Concentrated Marketing is an appropriate strategy when:

A company is small or new to the field

A company can survive and prosper by filling a niche not occupied by stronger companies

Gum disease fighting toothpastes

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Consumer Psychology (PSY - 514)

3. Countersegmentation

Some segments concentrate over time to a point where they don't warrant an individually designed marketing

program

In Countersegmentation a company seeks more generic needs or consumer characteristics that would apply to the

members of two or more segments into a larger single segment that could be targeted with individually tailored

product or promotional campaign

Example

Some business schools with wide course offerings in each department were forced to use Countersegmentation

strategy when they discovered that students simply did not have enough available credits to take a full spectrum of

in depth courses in their major areas of studies. They had to use Countersegmentation, e.g. by combining

advertising, publicity, sales promotion and selling course into a single course called promotion

Key Terms of Chapter 3

AIO's (activities, interests, opinions)

Market Segmentation

Benefit Segmentation

Positioning

Concentrated Marketing

Psychographic Inventory

Countersegmentation

Psychographic Segmentation

Demographic Characteristics

Sociocultural Variables

Demographic Segmentation

Use related segmentation

Differentiated Marketing

Usage situation

Geographic Segmentation

Hybrid Segmentation

Mass Marketing

Environmental Influences

Contents:

Culture

· What is Culture

· How Culture is Learnt

· Enculturation and Acculturation

· Language and Symbols

· Rituals

· Dynamic Culture

· Measurement of Culture

· Subculture

· Nationality subculture

· Age subculture

· Sex as subculture

Social Class

· What is Social Class

· Measurement of Social Class

· The Affluent Consumer

· Middle Class Consumers

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Consumer Psychology (PSY - 514)

Working Class and other non-Affluent Consumers

Social Groups

· Consumer Related Reference Groups

· Groups

· Family

The study of culture

The study of culture is a challenging undertaking because its primary focus is the broadest component of social

behavior an entire society

The Influence of Culture on Consumer Behavior

Culture is broad and pervasive and given its very nature It generally requires detailed examination of the character

of the total society. This includes factors that give a society its distinct flavor such as:

· Language

· Knowledge

· Laws religions

· Foods

· Customs

· Music

· Art

· Technology

· Work patterns

· Products

· Artifacts

Culture is a society's personality

Beliefs and Values

Beliefs and values component of our definition refers to accumulated feelings and priorities that individuals have

about "things" and possessions

The Belief Component

Beliefs consist of a very large number of verbal and mental statements. Beliefs reflect a person's particular:

· Knowledge or

· Assessment of something

· another person (people who come from the mountains are tough )

· A store (A certain chain of store)

· A product (a certain product, having a car is the sign of affluence)

· A brand (A certain brand is much better than the other)

The Values Component

Values are also beliefs. Values meet the following criteria:

· Relatively few in number

· Serve as guide for culturally appropriate behavior

· Enduring and difficult to change

· Not tied to specific objects or situations

· Widely accepted by the members of society

The Customs Component

Overt modes of behavior that constitute culturally approved or acceptable ways of behaving in specific situations.

Customs consist of everyday routine behavior of the consumer

· Diet sweetener for coffee

· Putting ketchup in a burger

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Consumer Psychology (PSY - 514)

Eating sweet after the main course

Where beliefs and Values are guides for behavior, customs are usual and acceptable ways of behaving

Broad Sense

Values and beliefs are mental images that affect a wide range of specific attitudes that in turn influence the

way a person is likely to respond in a specific situation

xample: the criteria a person uses to evaluate alternative brands in a particular product category:

· Preference for one of these brands influenced by both a person's general values (what constitutes quality, the

meaning of a country of origin)

· Specific beliefs perceptions about the quality of Chinese made products and the quality of American

products.