Advanced Marketing
Birgit Hagen
bhagen@eco.unipv.it
Review of key strategic
marketing concepts
• Segmentation of
– consumer markets
– business markets
• Identifying segments and targets
• Positioning
Identifying market segments
and targets
• Target marketing instead of scattered
marketing efforts
• Requires:
– Identification and profiling of distinct groups of
buyers who differ in their needs and wants
(=market segmentation)
– Selection of one or more market segments to
enter (=market targeting)
– For each segment, establishment and
communication of distinctive benefits of the
company’s market offering (=market
positioning)
Segmenting Consumer markets
Geographic
region, city, density, climate
Demographic
age, family size, family life cycle,
gender, income, occupation, education,
religion, race, nationality
Psycographic
lifestyle, personality, values, social
class
Behavioural
behavioural occasions, needs and
benefits, user status, usage rate,
readiness stage, attitude towards
product, decision roles
Behavioural segmentation
• Decision roles
• Initiator, influencer, decider, buyer, and user
• Also important in the business sector!
=“ Buying center”
• Buyer-readiness stage; Marketing
funnel
– Aware, ever tried, recent trial, occasional user,
regular user, most often used
• also used to verify efficacy of marketing
programmes
Behavioural segmentation
• Loyalty status
– Hard core loyals
– Split loyals
– Shifting loyals
– Switchers
• Nielsen, combines regional and
behavioural criteria (panels)
• Ad hoc studies
Psychographic segmentation
• Vals (signifying values and lifestyle),
classifies consumers along
“consumer motivation” (ideals,
achievement, self-expression) and
“consumer resources”
http://www.strategicbusinessinsights.com/vals/survey
new.shtml
Psychographic segmentation
• Vals groups with higher resources:
– Innovators: successful, sophisticated, active, “takecharge” people with high self-esteem; purchases often
reflect cultivated tastes for relatively upscale, nicheoriented products
– Thinkers: mature, satisfied, and reflective people
motivated by ideals and who value order, knowledge
and responsibility; seek durability, functionality, and
value in products.
– Achievers: successful, goal-oriented people who focus
on career and family; favour premium products that
demonstrate success to their peers;
– Experiencers: young, enthusiastic, impulsive people
who seek variety and excitement; spend a high portion
of income in fashion, entertainment and socializing.
Psychographic segmentation
• Vals groups with lower resources:
– Believers: conservative, conventional, and traditional
people with concrete beliefs; prefer familiar products
and are loyal to established brands
– Strivers: trendy and fun-loving people who are
resource-constrained; favour stylish products that
emulate purchases of those with greater material
wealth.
– Makers: Practical, down-to-earth self sufficient people
who like to work with their hands; seek national
products with a practial or functional purpose.
– Survivors: elderly, passive people concerned about
change and loyal to their favourite brands.
Psychographic segmentation
Social classes:
• Upper upper – social elite, inherited wealth and well-known
families; large sums to charities, more than one home,
send children to private schools;
1%
• Lower uppers: high income or wealth through exceptional
ability in professions or business; come usually from middle
class; active in social and civic affairs; buy status symbols;
nouveau riche – try to impress those below them
2%
• ……………….
• Working class: average-pay-blue collar workers;depends
heavily on relatives for economic and emotional support,
advice on purchases; sharp sex division and stereotyping
38 %
Psychographic segmentation
• Lifestyle
– Is a person’s pattern of living as expressed in activities,
interests and opinions
– eg culture-oriented, sports-oriented, outdoor-oriented
• One of the most well-known lifestyle models
“sagacity lifestyle model” – family life cycle
–
–
–
–
Dependent (eg children still living at home with parents)
Pre-family (with their own households but no children)
Family (parents with at least one dependent child)
Late (parents with children who have left home, or older
childless couples).
– Each group subsequently further divided along
income/occupation.
Psychographic segmentation
• Personality and self-concept
– distinguishing human psychological traits that lead to
relatively consistent and enduring responses to
environmental stimuli. =self-confidence, dominance,
autonomy, sociability, adaptability….
– Affected by everything associated with a person –
friends, neighbourhood, activities, clothes etc.
• Brand personality: Ferrero – sincerity,
competence; Levi’s -youthful, rebellious,
authentic; Axe – seduction, masculin,
individuality; Marlboro-masculin, freedom,
adventure; IBM old- Apple young; Cokeconforming - Pepsi - irriverent;
Psychographic segmentation
• Beliefs, attitudes: acquired through
experience and learning
– perception: selective attention-selective
distortion-selective retention
- belief system: descriptive thought about
something: make up product and brand
images
– attitudes: enduring favorable or unfavorable
evaluations, emotional feelings, action
tendencies towards some object or idea
– Lead people to behave in a consistent way
Toothpaste benefit
segmentation
Benefit
segments
Demographics
Behaviouristics
Psycographics
Economy
(Low price)
Men
Heavy users
High
autonomy,
value
oriented
Medical
(Decay
prevention)
(large)
Families
Heavy users
Hypochondriac,
conservative
Cosmetic
(Bright
teeth)
Teens, young Smokers
adults
High
sociability,
active
Taste
(good
tasting)
Children
High selfinvolvment
hedonistic
Spearmint
lovers
Brands
Premium wine segmentation
– Enthusiast (12 %): skewing female, average income about
76.000 $; 3 % luxury enthusiasts, skew more male with a higher
income
– Image seekers (20 %): skews male with an average age of 35;
use wine as a badget to say who they are, are willing to pay more
to make sure they get the right bottle
– Savvy shoppers (15 %): love to shop a believe they do not have
to spend much for a good bottle of wine; happy to use the bargain
bin
– Traditionalist (16 %): traditional values, like to buy brands
they’ve heard of and from established wineries; average age is
50/68 % female;
– Satisfied sippers (14 %): not knowing much about wine, tend to
buy the same brand; ½ of what they drink is white zinfandel
– Overwhelmed (23 %): potentially attractive market, find
purchasing wine confusing
Identifying market segments
and targets: BMW
• The ultimate driving machine – Bayerische
Motorenwerke AG – stands for both
performance and luxury
• At the turn of the century consumer
attitudes change: desire a variety of
design, size, price and style choices;
BMW grows its product line by targeting
specific market segments;
BMW cont’d
• Which resulted in:
– Unique premium-priced cars such as SUVs,
roadsters and less expensive compact cars
such as the 1 series; redesigned its 3,5,7
series making them unique in appearance yet
remaining exceptional in performance
– 7 series: upper conservatives: wealthy
traditional consumers; don’t like sporty cars;
added an influx of electronic components iDrive
BMW cont’d
• X5- upper liberals who achieved success in
the 90s and had gone on to have children
and extracurricular activities (biking, golf,
skiing) – biggers cars for active lifestyles
and growing families – high performance
luxury SUV
• 1 Series and X3 SUV for the target of
“modern mainstream” – also family
focused and active but had previously
avoided BMW because of its premium
cost.
BMW cont’d
• Convertibles and roadsters to target
“post moderns” a high income group that
continues to attract attention with more
showy, flamboyant cars; also BMW 6
series targeted this group.
Volkswagen commercials
Giulietta – Audi A 3
Business market segmentation
• Demographic
– Industry: which industries should we serve?
– Company size: what size companies should we serve?
– Location: what geographical areas should we serve?
• Operating variables
– Technology: what customer technologies should we
focus on?
– User or non-user status
– Customer capabilities: those who need many or few
services?
Business market segmentation
• Purchasing approaches
– Should we serve companies with a highly centralized or
dezentralized purchasing organisation?
– Nature of existing relationship: companies with which
we have strong relationships or most desirable
companies?
– Purchasing criteria: should we serve companies that are
seeking quality? Service? Price?
• Situational factors
– Order size: focus on large or small orders?
• Personal factors
– Loyalty: should we serve companies that show high
loyalty to their suppliers?