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Profit potential for segment
o Most important test of a segment
o Segmentation doesn’t stick LEARN IT
o Least often applied in practice
o Is the segment responsive to communications
o Don’t spend a lot of time doing segmentation strategy and have the segment not roll
Market segments that are growing
o Single women home buyers
o Spanish speaking segment on web
o Under-15s technology, mobile gaming, e-learning
 Siblings
Product categories that are growing
o Green products
o Car sharing
 Car2go
 Zip car
o Long-term health care
o Tablets
Segmentation is NICHE MARKETING
o The process of identifying a needs-segment and targeting a product for that segment
 How can we segment our class
 Male/female
 Eyeglasses
 Left handed people
 Anything left handed – London
 Southpaw – san diego
Niche marketing: segmentation made simple
o Probe to find or create new segments
o HP consumers interested in value and quality hardware at a slightly higher price
o Dell – same features, cut prices by selling direct to consumer through advertising instead of
retailers
Segmentation Examples
o Procter & Gamble
 Tide – Detergents
 Cheer – Detergents
 Bold – detergents
 All different segments
Segmentation evolved from
o Mass market: model sees everybody as a potential customer and tries to reach the widest
possible audience for a product
o Dishwashing and shitting
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Next segmentation evolved into
o Marketers were able to target those audiences and able to slice them up into pieces
o Kids advertising was really successful
o Segmenting targeting kids was the next evolution
Now segmentation evolved into
o One to model
 Brand image
 Database
o Special deals, things that interact with consumers
o What we see today, Apple connecting with consumers
The segmentation process today
o Step 1: what are gonna do, how are we going to reach
o Step 2: use geographic, demographic
o Step 3:
o Step 4: rank segments – comes back to making money, more efficient and effective with
communication
STEP 1: Promotion uses for segmentation
o Existing
o Seeking customers
Marketing to existing customres
o Most profitable segment
o 65% of the average company’s business comes from current customers
o Costs 4-5 times to get new customer than keep an existing
o LL BEAN
 Male outdoor clothing
 How do you get your segment to spend more
 LL Kids
 Expanding, make money from current customers
 70% of consumers have kids
o How do you get your customers to use more of your product
 AWARDS PROGRAM
 AIRLINES
 Arm and hammer
 Baking soda
 Toothpaste
 Fridge odor removal
 Cleaning drains
Seeking new customers
o Analyzing trends
o Brain reserve and trend watching – NY marketing firms
 Cocooning – the need to protect oneself from the harsh outside world
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Cashing out working men and women opting for simpler stress free lives
Pleasure revenge predicted new fondness for meats desserts and other comfort
foods
Trends for 2014
o Buy Local
o The mobile device as everything
o Premiumization
 Recession
Premiumization
o WATER
 Bling h20 – frosted glass, corked bottle
 Tasmanian rain – captured in Australia
o BEER
 Carlsberg 900 beer
o Revona Black – first fashionable toilet paper – $3/roll
Seeking new customers
o Improving media choices
o Oxygen – young moms
o Black entertainment television – higher income black viewers
o ESPN – men
o Creating sharper messages
 Use segmentation to find out what their best prospects will respond
 Use their terminology, talk to them in their language
Step 2: defining segments
o Identify best existing customers
o What makes them alike
o What makes them different
o What consumer traits are associated with using/likeing product
o Defining your segments – Research about your consumer
Segmentations variables
o Geographic information – local, regional, national, international
o Demographic – sex, age, marital status, occupation
o Psycographic/lifestyle & values information – profiles
o Behavioral information – reveals product use
Geographic segmentation
o Global segments
 Global Youth market
 Global Affluent
 Global cyberspace
o Assuming people