J. Paul Peter
•
James H. Donnelly, Jr.
P 5-1
1-1
6th Edition
Marketing
Management
Knowledge and Skills
Chapter 5
P 5-2
Market
Segmentation
A Model of the Market Segmentation Process
Delineate firm’s current situation
Determine consumer needs and wants
Divide markets on relevant dimensions
Develop product positioning
Decide segmentation strategy
P 5-3
Design marketing mix strategy
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Developing Market Segments for Woman’s Apparel
Conservative
P 5-4
Size
23% of population
16% of total sales
35-55 years old
Traditional
Update
38% of population
40% of total sales
25-49 years old
16% of the
population
24% of total sales
25-49 years old
Age
Values
Conservative values
Satisfied with present
status
Traditional values
Active, busy,
independent, self
confidant
Contemporary
values, Active,
busy,independent
very selfconfident
Employment
Has job, nor career
Family-and Job/
career-oriented
Family-and Job/
career-oriented
(continued)
SOURCE: Michael Levy and Barton A. Weitz, Retailing Management, 3d ed. (Boston, MA: Irwin/McGraw-Hill, 1998), p. 148.
Developing Market Segments for Woman’s Apparel
P 5-5
Conservative
Traditional
Update
Income
Limited
disposable
income
Considerable
Income
Considerable
Income
Benefits Sought
Price driven, reacts
to sales
Wants easy care
and comfort
Not interested
in fashion
Defines value as:
Price
Quality
Fashion
Quality driven, will
pay a little more
Wants traditional
styling, seeks
clothes that last
Interested in
newness
Defines value as:
Quality
Fashion
Price
Fashion driven,
expresses self
through apparel
Wants newness in
color and style
Shops often
Defines value as:
Fashion
Quality
Price
SOURCE: Michael Levy and Barton A. Weitz, Retailing Management, 3d ed. (Boston, MA: Irwin/McGraw-Hill, 1998), p. 148.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Examples of Market Segments
Segmentation Base
P 5-6
Geographic:
Continents
Africa, Asia, Europe, North America, South America
Global regions
Southeast Asia, Mediterranean, Caribbean, China, Canada
Countries
France, United States, Brazil,
Country regions
Pacific Northwest, Middle Atlantic, Midwest
City, county, or SMSA size
Under 5,000people, 5,000-19,999, 20,000-49,999, 50,000+
Population density
Urban, suburban, rural
Climate
Tropical, temperate, cold
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Segmentation Base
Examples of Market Segments
P 5-7
Demographic:
Age
Under 6 years old, 6-12, 13-19, 20-29, 30-39, 40-49, 50+
Gender
Male, female
Family size
1-2 persons, 3-4 persons, more than 4 persons
Family life cycle
Single, young married, married with children, sole survivor
Income
Under $10,000 per year, $10,000-$19,999, $20,000-$29,999,
40,000-$39,999, $40,000-49,999, $50,000+
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Examples of Market Segments
Segmentation Base
Education
Grade school or less, some high school, graduated from
high school, some college, graduated from college, some
graduate work, graduate degree
Marital status
Single, married, divorced, widowed
Social
Culture
American, Hispanic, African, Asian, European
P 5-8
Subculture
Religion
Jewish, Catholic, Muslim, Mormon, Buddhist
Race
European-American, Asian-American, African-American,
Hispanic-American
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Segmentation Base
Nationality
Social class
Thoughts and feelings
Knowledge
French, Malaysian, Australian, Canadian, Japanese
Upper class, middle class, working class, lower class
Expert, novice
High, medium, low
Positive, neutral, negative
Convenience, economy, prestige
Innovator, early adopter, early majority, late majority
laggers, nonadopter
Unaware, aware, interested, desirous, plan to purchase
High, moderate, low
Involvement
Attitude
Benefits sought
Innovativeness
Readiness stage
Perceived risk
P 5-9
Examples of Market Segments
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Segmentation Base
P 5-10
Behavior
Media Usage
Specific media usage
Payment method
Loyalty status
Usage rate
User status
Usage situation
Examples of Market Segments
Newspaper, magazine, TV, internet
Sports Illustrated, Life, Cosmopolitan
Cash, Visa, MasterCard, American Express, check
None, some, total
Light, medium, heavy
Non user, ex-user, current user, potential user
Work, home, vacation, commuting
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Consumer Markets
Segmentation Base
P 5-11
Combined approaches
Psychographics
Person/situation
Geodemography
Examples of Market Segments
Achievers, strivers, strugglers
College students for lunch, executives for business dinner
Blue Blood Estates, Towns and Gowns, Hispanic Mix
(continued)
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Useful Segmentation Bases for Consumer and
Organizational Buyer Markets
Organizational Buyer Markets
Segmentation Base
Source loyalty
Purchases product from one, two, three, four, or more suppliers
Company size
Small, medium, large relative to industry
Purchase quantity
Small, medium, large account
Product application
Organization type
Location
Purchase status
Production, maintenance, product component
Manufacturer, retailer, government agency, hospital
North, south, east, west sales territory
New customer, occasional purchaser, frequent purchaser,
nonpurchaser
Price, service, reliability of supply
Attribute importance
P 5-12
Examples of Market Segments
Irwin/McGraw-Hill
Figure 5-2
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
P 5-13
Toothpaste Market Benefit Segments
Figure 5-3
Sensory
Segment
Sociable
Segment
Worrier
Segment
Independent
Segment
Principal benefit
sought
Flavor and
product
appearance
Brightest
of teeth
Decay
prevention
Price
Demographic
strengths
Children
Teens, young
people
Large
Families
Men
Special behavioral
characteristics
Users of
spearmintflavored
toothpaste
Smokers
Heavy users
Heavy users
(continued)
SOURCE: Adapted from Russell I. Haley, “Benefit Segmentation: A Decision-Oriented Research Tool, “Journal of Marketing, July 1968,
pp. 30-35.
P 5-14
Toothpaste Market Benefit Segments
Figure 5-3
Sensory
Segment
Sociable
Segment
Worrier
Segment
Independent
Segment
Brands
disproportionately
favored
Colgate
Macleans,
Ultra Brite
Crest
Cheapest
brand
Lifestyle
characteristics
Hedonistic
Active
Conservative Valueoriented
SOURCE: Adapted from Russell I. Haley, “Benefit Segmentation: A Decision-Oriented Research Tool, “Journal of Marketing, July 1968,
pp. 30-35.
VALS 2 Eight American Lifestyles
Actualizers
Principle
oriented
Status
Figure 5-4
Abundant resources
oriented Action
oriented
Fulfilleds
Achivers
Experiencers
Believers
Strivers
Makers
Strugglers
P 5-15
Minimal resources
(continued)
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
VALS 2 Eight American Lifestyles
Figure 5-4
Actualizers. Those consumers have the highest incomes and such high selfesteem and abundant resources that they can indulge in any or all self-orientations.
They are located above the rectangle. Image is important to them as an expression
of taste, independence and character. Their consumer choices are directed toward
the finer things in life.
Fulfilleds. These consumers are the high-resource group of those who are
P 5-16
principle oriented. They are mature, responsible, well-educated professionals.
Their leisure activities center on their homes, but they are well informed about
what goes on in the world and open to new ideas and social change. They have
high incomes but are practical consumers.
(continued)
SOURCE: Martha Farnsworth Riche, “Psychographics for the 1990s,” American Demographics, July 1989, pp. 24-26ff.
VALS 2 Eight American Lifestyles
Figure 5-4
Believers. These consumers are the low-resource group of those who are
principle oriented. They are conservative and predictable consumers who favor
American products and established brands. Their lives are centered on family,
church, community, and the nation. They have modest incomes.
Achievers. These consumers are the high-resource group of those who are status
P 5-17
oriented. They are successful, work-oriented people who get their satisfaction
from their jobs and families. They are politically conservative and respect
authority and the status quo. They favor established products and services that
show off their success to their peers.
(continued)
SOURCE: Martha Farnsworth Riche, “Psychographics for the 1990s,” American Demographics, July 1989, pp. 24-26ff.
VALS 2 Eight American Lifestyles
Figure 5-4
Strivers. These consumers are the low-resource group of those who are status
oriented. They have values very similar to achievers but have fewer economic,
social, and psychological resources. Style is extremely important to them as they
strive to emulate people they admire and wish to be like.
Experiencers. These consumers are the high-resource group of those who are
P 5-18
action oriented. They are the youngest of all of the segments with a median age of
25. They have a lot of energy which they pour into physical exercise and social
activities. They are avid consumers, spending heavily on clothing, fast foods,
music, and other youthful favorites-with particular emphasis on new products and
services.
(continued)
SOURCE: Martha Farnsworth Riche, “Psychographics for the 1990s,” American Demographics, July 1989, pp. 24-26ff.
VALS 2 Eight American Lifestyles
Figure 5-4
Makers. These consumers are the low-resource group of those who are action
oriented. They are practical people who value self-sufficiency. They are focused on
the familiar-family,work, and physical recreation-and have little interest in the
broader world. As consumers; they appreciate practical and functional products.
Strugglers. These consumers have the lowest incomes. They have too few
P 5-19
resources to be included in any consumer sell-orientation and are thus located
below the rectangle. They are the oldest of all the segments with a median age of
61. Within their limited means, they tend to be brand-loyal consumers.
SOURCE: Martha Farnsworth Riche, “Psychographics for the 1990s,” American Demographics, July 1989, pp. 24-26ff.
Claritas PRIZM Cluster 36-Towns and Gowns
Figure 5-5
The “towns and gowns” cluster describes most of our college towns and university campus
neighborhoods. With a typical mix of half locals (towns) and half students (gowns). It is
wholly unique, with thousands of penniless 18- to 24-year-old kids, plus highly educated
professionals, all with a taste for prestige products beyond their evident means.
P 5-20
Predominant Characteristics
• Households (% U.S.)
• Population:
• Demographic caption:
• Ethnic Diversity:
• Family type:
•Predominant age ranges:
• Education:
• Employment level:
• Housing type:
• Density percentile:
1,290,200 (1.4%)
3,542,500
College-town singles
Dominant white, high Asian
Singles
Under 24, 25-34
College graduates
White collar/service
Renters/multiunit 10+
58 (1=sparse, 99 = dense)
(continued)
SOURCE: Valarie Walsh and J. Paul Peter, “Claritas Inc.: Using Compass and PRIZM,” in Marketing Management: Knowledge and Skills,
5th ed., eds. J. Paul Peter and James H. Donnelly, Jr. (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 334
Claritas PRIZM Cluster 36-Towns and Gowns
More Likely to:
Lifestyle
Go to college football games
Play racquetball
Go skiing
Play billiards/pool
Use cigarette rolling paper
Use a charter/tour bus
P 5-21
Radio/TV
Watch VH1
Listen to alternative rock music
Watch “Jeopardy”
Listen to variety radio
Watch “The Simpsons”
Figure 5-5
Products and Services
Have personal education loan
Use an ATM card
Own a Honda
Buy 3+ pairs of jeans annually
Drink Coca-Cola Classic
Eat Kraft Macaroni and Cheese
Print
Read Self
Read newspaper comic section
Read Rolling Stone
Read GQ
SOURCE: Valarie Walsh and J. Paul Peter, “Claritas Inc.: Using Compass and PRIZM,” in Marketing Management: Knowledge and Skills,
5th ed., eds. J. Paul Peter and James H. Donnelly, Jr. (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 334
Positioning Map for Automobiles
Figure 5-6
Luxurious
•Lexus
• Mercedes
Cadillac •
•BMW
•Porsche
Lincoln •
Traditional
•Chrysler
Oldsmobile • • Buick
Mercury •
Ford •
Dodge •
Plymouth •
•Pontiac
•Chevrolet
•Nissan
•Toyota
•Saturn
Sporty
•VW
P 5-22
Functional
SOURCE: Gilbert A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers, 2d ed. (Burr Ridge, IL: Irwin/McGraw-Hill,
1998), p. 221.
P 5-23
Differences in Marketing Strategy for Three Segmentation
Alternatives
Strategy
Elements
Mass
Marketing
Single Market
Segmentation
Market definition
defined
Broad range of
One well-defined
consumers
consumer group
Multiple
Market
Segmentation
Two or more wellconsumer groups
Product strategy
Limited number of
One brand tailored
products under one
to one consumer
brand for many types group
of consumers
Distinct brand for each
consumer group
Pricing strategy
One “popular” price
range
Distinct price range for
each consumer group
One price
range tailored to
the consumer group
(continued)
SOURCE: Joel R. Evans and Barry Berman, Marketing, 5th ed. (New York: Macmillan, 1992), p. 219. © 1992.
Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, NJ.
P 5-24
Differences in Marketing Strategy for Three Segmentation
Alternatives
Strategy
Elements
Mass
Marketing
Single Market
Segmentation
Multiple
Market
Segmentation
Distribution strategy
All possible outlets
All suitable outlets
All suitable outlets
differs by segment
Promotion strategy
Mass media
All suitable media
All suitable media
differs by segment
Strategy emphasis
Appeal to various
types of consumers
through a uniform,
broad-based
marketing program
Appeal to one specific
consumer group
through a highly specialized, but uniform
marketing program
Appeal to two or more
distinct market segments through different
marketing plans catering
to each segment
SOURCE: Joel R. Evans and Barry Berman, Marketing, 5th ed. (New York: Macmillan, 1992), p. 219. © 1992.
Reprinted by permission of Prentice Hall, Inc., Upper Saddle River, NJ.
