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Hogeschool van Amsterdam Interactieve Media

Any colour you like as long as it’s black - segmentation: the basis of marketingMarketing Hoorcollege blok 2 week 2


Or:

Why I am not in the same target group as Brad Pitt & Johnny Depp (at least) when it comes to cars


Learning goals

By the end of the colleges and reading you should: Know the three elements of marketing core strategy:

segmentation, targeting & positioning (STP) Understand how STP helps organizations deal with one of

the main trends in western and some developing markets today

Be in a position to develop a marketing segmentation, choose a target group and create a positioning for an offer

* You should have also read chapters 9 & 10 in the last blok


Agenda

A quick recap

The aims of blok 2

If you’re not segmenting, then you’re not marketing

Segmentation

Summary


Previously on…


We argued that marketing is about creating mutually beneficial exchange

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Exchange is the process where you willingly give something of value to another, in return for

getting something of value to you



And that marketing is a process that creates offers to customers


Our aim in blok 2 is to

Take you through the process of creating a marketing offer With the exception of promotion - which will be covered in

blok 3 or 4

Give you some tools (in addition to the UCD tools) you can use to do this

Help you understand why this process is even more important in today’s marketing environment


If you’re not segmenting, then you’re not marketing


Any colour you like, as long as it’s black

The Model T Ford is regarded as the first car to be built on using a production line

Henry Ford wanted to produce quickly

Black paint dried more quickly so the only colour you could have was black

Soon Ford lost share to companies that offered other colours


No cup holders please we’re German

In the 1990’s cup holders became popular in the USA

German companies such as BMW and Mercedes didn’t see them as necessary (cars were about engineering not cup holders!)

Their market share fell in the USA


The mobile phone is just a device

Early mobile phones were seen as just devices to make calls

The idea of a mobile phone as a fashion accessory was at first not accepted by many companies

Nokia did understand this and were the first company to offer different designs and colours

Nokia gained huge market shares


The lessons of these stories

1. The customer really is king

2. One offer never appeals to everyone

3. Offers to everyone will be beaten by offers to targeted groups

4. Marketing is becoming more complex (and more exciting - no honestly it is…)


Markets are becoming more fragmented

In the developed economies at least the idea of mass marketing is essentially dead One product for a large market does not work anymore

Consumers are becoming more sophisticated (verfijnd) and choosy They have better access to information They have more choice They are overloaded with marketing messages They are more cynical

This is especially true in our “always on” world


Result: the old model is broken


What’s wrong?

The problem is that there are too many “me too” offers on the market today These are products (and price, place, promotion) that try to

reach the same broad market segment with basically the same offer


What’s the solution?

One solution suggested by Seth Godin in his book Purple Cow is to:

Make remarkable products

that appeal to a smaller better

defined segment


So how do we do this?


The start of the answer is…

Better market segmentation

Since this allows you to Target the right segment to approach Which means you can position your offer more effectively Which leads to better marketing mixes Which leads to your customers choosing your offer And telling their friends


Segmentation

Not everyone will love you, but some might if you know who they are


Segmentation

A market segment is just a group of potential customers with the same needs and wants

Marketers use different factors that might reveal needs and wants to make segments

For example age and gender are very popular


But this isn’t good enough…Remember this?

Based on age & gender we are in the same target group!

Yeah right!

But how can we tell us apart?


Well marketers tend use segmentation variables…


Task:What would allow you to separate Brad, Johnny & Charlie?

As I go through each of the segmentation variables use the sheet I have given you to work out which might separate Brad, Johnny and me if you were company wanting to develop a car


Geographic variables

Region Continent, groups of

countries such as Benelux, country, areas with a country such as the Randstad, area within a city such as Amsterdam Noord

Country size

City size

Population density

Climate


Demographic variables

Age

Gender

Family size

Family life-cycle

Life stage

Income

Occupation

Educational level

Religion

Race

Nationality


Psychographic variables

Social class Lower, working, middle,

upper

Lifestyle Interests, hobbies, beliefs,

attitudes

Personality Ambitious, introvert,

extrovert, social


Behavioural variables

Purchase occasion

Benefits desired

User status

Usage rate

Loyalty

Readiness stage

Attitude to the product, brand or company


Multivariable segmentation

For most products one variable is not enough, it will tell you little about the target group So organizations tend use multivariable segmentation

This is simply combining segmentation bases: Simple multivariable segmentation uses two or more bases from

one category E.g. Age and gender from demographic variables

Advanced multivariable segmentation uses two or more bases from two or more categories

E.g. Lifestyle, age, family life cycle and attitude to the product Multistage segmentation uses different variables at different times

E.g. Region, then lifestyle and age

In general multivariable segmentation leads to better customer insights


What makes a good market segmentation?

A good market segmentation is one that is: Measurable - you know how many members it has and you

can track their purchases Accessible - you can contact them and make your offer Sustainable - you can make a profit by serving them Actionable - you are able develop offers that are attractive

to the segment

In addition a good segmentation allows you to understand the customer from their point of view so that you can make offers that will meet their needs better than your competitors


Summary

The aim of marketing is to create mutually beneficial exchange by creating offers that are more attractive to customers that alternatives

But the consumer is becoming more choosy about what they consider beneficial In the Internet age this is even easier

As a result offers aimed at “everyone” will be beaten by more targeted offers

To survive in this environment we must become better at segmenting the potential market into meaningful groups that can be approached profitably If you’re not segmenting, then you’re not marketing


Brad, Johnny & Charlie:My answer

hogeschool van amsterdam interactieve media any colour you like as long as it’s black -...

Documents

offer slide

blok slide

popular slide

usa slide

broken slide

world slide

marketing segmentation

marketing offer