Marketing Segmentation Notes

Marketing Segmentation

• The process of breaking down large groups into smaller groups based on meaningful characteristics and shared needs.
• Source reference: Modern Marketing Principles, STUKENT.

Why Divide?

• Not everyone is the same.
• Not everyone has the same needs.
• Source reference: Modern Marketing Principles, STUKENT.

How Do We Segment?

• Demographic
• Psychographic
• Geographic
• Market Usage Behavior
• Source reference: Market Segmentation, STUKENT.

Demographic Segmentation

• Uses statistics such as age, gender, income, ethnicity, and education.
• Common demographic variables include:
  • Age: $ext{Age}$
  • Gender: $ext{Gender}$
  • Ethnicity: $ext{Ethnicity}$
  • Marital Status: $ext{Marital Status}$
  • Income: $ext{Income}$
  • Occupation: $ext{Occupation}$
• Notes: Includes basic, quantifiable characteristics used to define segments.

Psychographic Segmentation

• Uses consumer activities, values, interests, and opinions.
• Emphasizes lifestyle, personality, and social class in segment definitions.

Geographic Segmentation

• Uses geographic location to define segments (region, country, city, climate, density).

Claritas

• Tool/resource mentioned: https://claritas360.claritas.com/mybestsegments/
• Source reference: STUKENT.

Usage Segmentation

• Uses how often a consumer uses or how a consumer uses a product.
• Key questions include:
  • When?
  • How?
  • How Often?
• Source reference: STUKENT.

Steps to creating a meaningful market segment

• Choose meaningful characteristics
• Choose the number of characteristics to include
• Determine if the segment is a desirable market segment
• Source reference: Modern Marketing Principles, STUKENT.

Identifiable, Sizable, Stable, Accessible, Congruent

• Identifiable: A target market is identifiable if a marketer can clearly identify the segments and can describe the traits or characteristics of that segment.
• Sizable: A segment is sizable when there are enough consumers within the group to support profitable product sales.
• Stable: A segment is more stable if it is predictable in its purchasing ability and behavior.
• Accessible: A segment is accessible if a marketer can reach the consumers for marketing and for sales of the product.
• Congruent: A segment should align with the company’s objectives and resources; both value the same thing.
• Source reference: Modern Marketing Principles, STUKENT.

Targeted Marketing Strategy

• Segment 1, Segment 2, Segment 3 with Company Marketing Mix
• Types of Marketing Strategies:
  • Undifferentiated Marketing (Mass Marketing): one marketing mix for the entire market.
  • Differentiated Marketing: targets more than one market segment and develops a unique marketing mix to target each segment separately.
  • Concentrated Marketing: targets one target market and customizes a marketing mix for that target market only.
• Source reference: STUKENT.

Undifferentiated Marketing

• When a marketer uses only one strategy or marketing mix for the entire market.
• Also known as mass marketing.
• Examples implied by slide: Share a Coke campaign encouraging sharing with friends.
• Source reference: STUKENT.

Undifferentiated Marketing – Example

• Campaign themes referenced: "Share a Coke with a friend"; marketing site: shareacoke.com.au; notable messages include "open happiness".
• Brand example: Coca-Cola (Kylie, Luke references in slides).
• Source reference: STUKENT.

Differentiated Marketing

• When a company targets more than one market segment and develops a unique marketing mix to target each segment separately.
• Examples mentioned: Gain (Gain detergent), Tide (laundry products).
• Source reference: STUKENT.

Concentrated Marketing

• When a marketer selects one target market and customizes a marketing mix for that target market only.
• Examples mentioned: Rolls Royce, Lefty’s, A3D GWD.
• Source reference: STUKENT.

A Thought Experiment: Imagine you are a Nike employee

• Prompt: How might you describe your ideal customer walking into your store?
• Source reference: Modern Marketing Principles, STUKENT.

The Buyer Persona

• A representation of a marketer’s market segment.
• A Buyer Persona helps to give tangibles a face to the target market.
• Source reference: Modern Marketing Principles, STUKENT.

Forming the Buyer Persona

• A good buyer persona should include enough information to describe a real person — think of your neighbor, one of your past instructors, or a peer.
• The persona should be based on real research.
• Source reference: Modern Marketing Principles, STUKENT.

When Creating a Buyer Persona

• Include:
  • General demographic information
  • Goals
  • Values
  • Challenges
  • A day in the life
  • Sources of information
  • Pain points
  • Fun facts
  • Marketing message
• Source reference: Modern Marketing Principles, STUKENT.

Persona Example: Jill Anderson

• AGE: $35$
• WORK: Regional Director
• FAMILY: Married, $1$ Child
• LOCATION: Austin, TX
• ARCHETYPE: The Frequent Flyer
• Bio: Jill is a Regional Director who travels $4 ext{-}8$ times each month for work. She has a specific region in which she travels, and she often visits the same cities and stays at the same hotel. She is frustrated by the fact that no matter how frequently she takes similar trips, she spends hours of her day booking travel. She expects her travel solutions to be as organized as she is.
• Goals:
  • $To spend less time booking travel$
  • $To narrow her options quickly$
• Frustrations:
  • $Too much time spent booking - she's busy!$
  • $Too many websites visited per trip$
  • $Not terribly tech savvy - doesn't like the process$
• Personality:
  • Introvert
  • Analytical
  • Loyal
  • Passive
• Motivations:
  • Extrovert
  • Creative
  • Price
  • Fickle
  • Comfort
  • Active
  • Convenience
  • Speed
  • Loyalty/Miles
  • Brands
• Preferred Channels:
  • Chrome
  • Practical
  • Mobile
  • Email
• Marketing Messages (examples shown):
  • KAYAK
  • Expedia
  • ACE HOTEL
• Additional notes: The slide shows additional branding cues such as shared experiences and travel efficiency cues.
• Source reference: Modern Marketing Principles, STUKENT.

Review #1

• There are many ways to segment consumers.
• The goal is to create a meaningful target market.
• Source reference: STUKENT.

Review #2

• A buyer persona is a valuable tool to understand your consumers better.
• Source reference: STUKENT.