Positioning and Targeting for MarCom Efforts

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Chapter Four
The Fundamental Marcom Decisions Segmenting and
Targeting
? 2007 Thomson South-Western
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Segmenting Targeting

• Goal
• Targeting allows marketing communicators to more
  precisely deliver their messages and prevent
  wasted coverage to people falling outside the
  targeted market.

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Consumer Characteristics
Behaviorgraphics
Benefit
Psychographics
Geodemographics
Demographics
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Classification of Four General Targeting
Characteristics
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Behaviorgraphic Targeting

• Based on how people behave (with respect to a
  particular product category or class of related
  products) e.g. past purchase behavior online
  search activity etc.
• The best predictor of ones future behavior is
  his or her past behavior.

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Behavioral Targeting for Tambrands
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Benefit Segmentation Targeting

• Segment and target consumers on the basis of the
  key benefit they seek from the product.
• Toothpaste category
• Automobiles category

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Psychographic Targeting

• Captures aspects of consumers psychological
  make-ups and lifestyles including their
  attitudes, values, and motivations as they relate
  to buying behavior in a particular product
  category

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Psychographic Segments

• Porsche example

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Psychographic Segmentation

• The Euroconsumer

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Psychographic Segmentation

• The Euroconsumer

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Cluster Analysis

• A statistical method for grouping similar objects
• Basis for market segmentation

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Spatial Display Scatter Diagram
Buy On price
Buy on image
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Illustrative Statements Used in a Banking-Related
Psychographic Study
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Four Psychographic Segments of Banking Behaviors
Bank Loyalists
Worried Traditionalists
Thrifty Bankers
Secured Investors
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Yankelovich MindBase Segments 8 general
segments and 32 specific subsegments
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The VALS Framework
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VALS

• Innovators
• Motivated by ideals, achievement, and
  self-expression
• Possess both high income and self-esteem
• Change leaders most receptive to new ideas and
  technologies.
• Active consumers buy upscale products and
  services.

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VALS

• Thinkers
• Motivated by Ideals
• Mature, satisfied, comfortable, and reflective.
• Well-educated and informed.
• Moderate respect for the status quo, but will
  consider new ideas.
• Practical consumers look for durability,
  function, and value.

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VALS

• Believers
• Motivated by Ideals
• Conservative, conventional people with concrete
  beliefs.
• Deeply rooted moral codes.
• Follow established routines organized around home
  and community.
• Favor American products and are loyal customers.

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VALS

• Achievers
• Motivated by their desire for achievement
• Goal-oriented lifestyles and deep commitment to
  career and family.
• Live conventional lives, respect authority and
  the status quo.
• Image is important and they value established,
  prestige products that demonstrate their success.
  

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VALS

• Strivers
• Motivated by achievement
• Trendy and fun loving.
• Concerned about the opinions of others.
• Money defines success.
• Active consumers who are as impulsive as their
  financial circumstances will allow.

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VALS

• Experiencers
• Motivated by self-expression
• Young, enthusiastic, compulsive consumers
• Seek variety, excitement, and new opportunities.
• Avid consumers who spend a comparatively high
  proportion of their income on fashion,
  entertainment, and socializing.

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VALS

• Makers
• Motivated by self-expression
• Express themselves and experience the world by
  working on it.
• Practical people who have constructive skills and
  value self sufficiency.
• Buy basic products and prefer value to luxury.

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VALS

• Survivors
• No strong primary motivation
• Few resources
• Primarily concerned with safety and security
• Cautious consumers
• Loyal to favorite brands, especially if they can
  purchase at a discount.

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What VALS type are you?

• Take the survey at
• http//www.sric-bi.com/VALS/presurvey.shtml

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Geodemographic Targeting

• Based on the premise that consumers who reside
  within geographic clusters such as zip codes or
  neighborhoods also share demographic and
  lifestyle similarities.
• You are where you live

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Geodemographic Targeting

• Several companies delineate geographical areas
  into common groups including
• ACI(ACORN)
• http//www.caci.co.uk/acorn/
• Experian (MOSAIC)
• http//www.appliedgeographic.com/mosaic.html
• Claritas (PRIZM )
• http//www.claritas.com/MyBestSegments/Default.jsp
  ?ID0SubIDpageNameHome

NE
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Claritas PRIZMNE

• PRIZMPotential Rating Index by Zip Markets and
  NENew Evolution of their original system. (Total
  66 clusters)

Suburban Pioneers
Bohemian Mix
White Picket Fences
Big Fish, Small Pond
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Claritas PRIZMNE
Bohemian Mix
a collection of young urbanites who represent
the nations most liberal lifestyles. Blend of
young singles and couples, students and
professionals and many racial backgrounds.
disproportionately quick to attend the latest
movie, frequent the newest nightclub or adopt
the latest laptop.
White Picket Fences
represents those households at the middle of
the U.S. socioeconomic ladder. Predominantly
young, middle-class, and married with children.
Suburban Pioneers
eclectic lifestyles, including a mix of young
singles, recently divorced and single parents
who have moved to older, inner-ring suburbs.
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Demographic Targeting

• Marcom practitioners are mainly concerned with
• the age structure of the population
• the changing household composition of the U.S.
• ethnic population developments

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World Population

• World Population Growth
• 6.67 billion (2009) to 8 billion (2025) to 9
  billion (2050)
• Changing Age Structure in United States
• Median age will increase to 38 by 2025
• More middle-aged Baby Boomers
• Fewer children, teenagers, and young adults due
  to decreased birthrates
• Both China and Indias populations dramatically
  exceed that of the United States.

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Worlds 25 Largest Countries as of 2007
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Aspects of the U.S. Population

• 293 million estimated population
• Ancestral diversity, with just over 7 referring
  to themselves as Americans, up from 5 in 1990.
  
• Relentless aging of the population

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Largest Ancestral Group of U.S. Residents
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Population of the United States by Age Group, as
of 2006
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The Changing Age Structure

• The U.S. population is aging relentlessly.
• Median Age

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30
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1970
1980
1990
2000
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Demographic Segments by Age Group

• Preschoolers (5 years or younger)
• Elementary-school-age children (6-11 years)
• Tweens (8-12 years)
• Teenagers (13-19 years)
• Millennial Generation or Generation Y
• Highly conformist, narcissistic, and fickle
  consumers
• Young adults (20-34 years)
• Generation X (Baby Busters)
• Yup Comers, Bystanders, Playboys, and Drifters

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An Appeal to PreschoolersParents
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An Appeal to Teenagers
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Demographic Targeting Marketing to
Preschoolers
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Demographic Segments Age

• Middle-Aged (35-54 years)
• Younger baby boomers and older Gen Xers
• Target category for luxury goods and youth
• Mature Consumers (55 years or older)
• Are 23 of the total U.S. population
• Have highest discretionary income and most assets
• Census Bureau classification Olders (55 to 64)
  Elders (65 to 74) and the Very Old (75 and over)
• Descriptive groups Healthy Hermits, Ailing
  Outgoers, Frail Recluses, and Healthy Indulgers

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An Appeal to Female BabyBoomers
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The Ever-Changing American Household

• Household Defined
• An independent housing entity, either rental
  property or owned property.
• U.S. Households
• Growing in number, shrinking in size, and
  changing in character
• Married couples with children families now
  represent less than one-third of all households
• Single person and unrelated persons households
  are a growing market

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Generation Y / Millenials / Net Generation

• About 70 million in numbers
• Age not yet 30 those generally born between
  1977 and 2002 (Gen X 1965 1976)
• Some put them as age 16 27 (1978 1989)
• High performance and high maintenance
• Speak your mind philosophy question everything
  willing and unafraid to challenge the status
  quo
• Very independent and tech-savvy

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Generation Y / Millenials / Net Generation

• Possess financial smarts
• Work-Life balance is not just a buzz word
• Change, change, change skeptical of employee
  loyalty multi taskers dont like to stay too
  long on one assignment
• High self-worth

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Generation Y / Millenials / Net Generation

• One in three is not a Caucasian
• One in four lives in a single parent household
• Three in four have working mothers
• Very practical / pragmatic group
• stumble on to the brand in unexpected places
• Strong sense of entitlement
• Want the best and feel they deserve it
• Ambitious with high expectations

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Generation Y / Millenials / Net Generation

• Gen Yers respond to humor, irony, and the
  (apparently) unvarnished truth. Sprite has scored
  with ads that parody celebrity endorsers and
  carry the tagline ''Image is nothing. Obey your
  thirst.'' J.C. Penney Co.'s (JCP) hugely
  successful Arizona Jeans brand has a new campaign
  showing teens mocking ads that attempt to speak
  their language. The tagline? ''Just show me the
  jeans.''

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Young Adults
Yup Comers The highest levels of education and
income, focus on intangible rewards and
confident about themselves Bystanders
Predominantly female African-Americans and
Hispanics, disposable income is low but love
fashion and shopping Playboys Pleasure before
duty lifestyle, self-absorbed, fun-loving and
impulsive Drifters Frustrated with their lives,
the least educated, and choose brands that offer
a sense of belonging and self-esteem
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Ethnic Population Developments
of population as of 2000
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African-Americans

• African Americans 40.5 million as of 2010, or
  13 of the U.S. population
• African Americans are attractive consumers
  because
• The average age of black Americans is
  considerably younger than that for Whites
• African-Americans are geographically
  concentrated, with ¾ of all blacks living in just
  16 states
• African-Americans tend to purchase prestige and
  name-brand products in greater proportion than do
  whites.

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Hispanic Americans (Latinos)

• Grew from 4 million in 1950 to an expected
  population of nearly 48 million in 2010.
• Hispanic Americans 25 of the U.S. population by
  2010, currently nearly 40 million U.S. residents.
  
• A key in designing effective advertising for
  Hispanics is to advertise to them in their
  dominant language.
• Interethnic differences in Cubans, Mexicans, and
  Puerto Ricans as well as differences within each
  grouping mean there is no one market.

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Top 10 U.S. Hispanic Markets (estimates as of
2006)
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Asian-Americans

• As of 2000, approximately 10.7 million Asians in
  the U.S. By 2010, the number will increase to 14
  million and more than 33 million by 2050.
• Asian-Americans on average are better educated,
  have higher incomes, and hold more prestigious
  jobs than any other segment of society.
• No single market.
• Some success with customizing marketing programs
  to Asian values.