L3A-MARKET SEGMENTATION

APA Format , please see attached for details and instructions, VALS types Attached

zip code is 43147.

thank you.

MARKET SEGMENTATION

Go to the “My Best Segments” portion of the Claritas Web site,

www.mybestsegments.com

Click on the tab that says ” Enter ZIP Code ” then enter your zip code to learn which segments are the top five for you home zip code. Follow the links for each of the five most common PRIZM segments to obtain a segment description.

Write up a summary of your results. Discuss the extent to which you believe these are accurate descriptions of the main segments of people who reside in your zip code.

2) You are to go to the SBI or Strategic Business Insight Web site and click on this link and complete the VALS Survey

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

After you submit your responses, a screen will display your primary and secondary VALS types. Click on the colored names of each segment to get additional information about them, and print out your results. Assess the extent to which these results reflect your lifestyle, and identify which characteristics accurately reflect your interests and activities and which do not.

Chapter 5

Market Segmentation

14 e

Market Segmentation

Process of dividing a market into groups of similar consumers and selecting the most appropriate group for the firm to serve

Target market: Group or segment a company selects to serve

Figure 5.1 – A Model of The Market Segmentation Process

Delineate The Firm’s Current Situation
Firms must do a complete situational analysis when embarking on a new or modified marketing program
Aids in determining objectives, opportunities, and constraints to be considered when selecting target markets and developing marketing mixes
Intended to be a reminder of tasks to be performed prior to marketing planning
4

Determine Consumer Needs and Wants
Successful marketing strategies depend on discovering and satisfying consumer needs and wants
Consumer needs and wants are translated into operational concepts at a strategic level
5

Divide Markets on Relevant Dimensions: Priori Versus Post Hoc Segmentation
Marketing manager decides on the appropriate basis for segmentation in advance of doing any research on a market
Priori segmentation
People are grouped into segments on the basis of research findings
Post hoc segmentation
6

Divide Markets on Relevant Dimensions: Relevance of Segmentation Decision
Selecting appropriate dimensions requires:
Managerial expertise
Managerial experience
Previous research
Purchase trends
Managerial judgment
Consideration and research of sought benefits
7

Divide Markets on Relevant Dimensions: Bases for Segmentation
Benefit segmentation: Focuses on satisfying needs and wants by grouping consumers on the basis of the benefits they are seeking in a product
Psychographic segmentation: Focuses on consumer lifestyles as the basis for segmentation
VALS: Psychographic approach
Stands for values and lifestyles
8

VALSTM Framework and Segments
Vertical dimension segments people based on the degree to which they are innovative and have resources
Horizontal dimension represents primary motivations for buying
9

Figure 5.4 – VALSTM Framework and Segments
10

Geodemographic Segmentation
Identifies specific households in a market by focusing on local neighbourhood geography
Creates classifications of actual, addressable, mappable neighbourhoods where consumers live and shop
Nielsen PRIZM
11

Develop Product Positioning
Positioning strategies used
Focusing on the superiority to competitive products
Based on use or application
Targeting particular types of product users
Relativity to a product class
Pitching directly against particular competitors
12

Positioning Map
Visual depiction of consumer perceptions of competitive products, brands, or models
Used to investigate how to position a product
Constructed by:
Surveying customers about various product attributes
Developing dimensions and a graph indicating the relative position of competitors
13

Figure 5.6 – Positioning Map for Automobiles
14

Decide Segmentation Strategy
Not to enter the market
Segment but to be a mass marketer
Market to one segment
Market to more than one segment and design a separate marketing mix for each
15

Criteria for Segmentation
Viable segments must be:
Measurable – Firms must be capable of measuring its size and characteristics
Meaningful – Should have sufficient sales and growth potential to offer long-run profits
Marketable – Can be reached and served by the firm in an efficient manner
16

Design Marketing Mix Strategy
Selection of target market and designing the market should go hand in hand
Marketing mix decisions are made in conjunction with target market selection
17

Chapter 2

Marketing Research

: Process and Systems for Decision Making

14 e

Marketing Research

Process by which information about environment is generated, analyzed, and interpreted

Aids decision making and is not a substitute for it

Reduces risks associated with managing marketing strategies

Vital for investigating the effects of various marketing strategies after implementation

Figure 2.1 – The Five Ps of the Research Process

Purpose of the Research
Determines why research is needed and what it is to accomplish
By the end of this stage managers and researchers should agree on:
Current situation involving the problem to be researched
Nature of the problem
Anything specific the research is designed to investigate

Plan of the Research
Details the nature of the research including:
Explanation of sample design and measures
Analysis techniques to be used
Critical issues are whether:
Primary or secondary data are needed
Qualitative or quantitative data are needed
Company will conduct its own research or contract with a marketing research specialist

Primary versus Secondary Data
Primary data: Collected specifically for the research problem under investigation
Secondary data: Previously collected data that could be used for the problem at hand

Figure 2.2 – Common Types of Information Available in a Secondary Data Search
Source: Joseph F. Hair, Jr., Mary Wolfinbarger Celsi, David J. Ortinau, and Robert P. Bush, Essentials of Marketing Research, 3rd ed. (Burr Ridge, IL: McGraw-Hill Education, 2013), p. 53

Qualitative Research
Involves face-to-face interviews with respondents
Designed to develop a better understanding of what they think and feel concerning a research topic

Types of Qualitative Research
Focus groups: Involve discussions among a small number of consumers led by an interviewer
Designed to generate insights and ideas about products and brands
Long interviews: Conducted by an interviewer with a single respondent for several hours
Designed to find out how individuals perceive products and are influenced by them

Quantitative Research
Involves systematic procedures designed to obtain and analyze numerical data
Types
Observational research: Involves watching people and recording relevant facts and behaviors
Survey research: Involves the collection of data by means of a questionnaire

Quantitative Research
Experimental research: Involves manipulating one variable and examining its impact on other variables
Mathematical modeling: Involves developing equations to model relationships among variables
Investigates the impact of various strategies and tactics on sales and brand choices

Comparison of Data Collection Methods Used in Marketing Research
Method Advantages Disadvantages
Focus groups Depth of information collected
Flexibility in use
Relatively low cost
Data collected quickly Requires expert moderator
Questions of group size and acquaintanceships of participants
Potential for bias from moderator
Small sample size
Mail surveys Cost-effective per completed response
Broad geographic dispersion
Ease of administration
Data collected quickly Refusal and contact problems with certain segments
Limited depth of response
Difficult to estimate nonresponse biases
Resistance and bias in collecting income, financial data
Lack of control following mailing

Comparison of Data Collection Methods Used in Marketing Research
Method Advantages Disadvantages
Telephone surveys Centralized control of data collection
More cost-effective than personal interviews
Data collected quickly Resistance in collecting income, financial data
Limited depth of response
Disproportionate coverage of low-income segments
Abuse of phone by solicitors
Perceived intrusiveness
Personal
(in-depth)
interviews More depth of response than telephone interviews
Generate substantial number of ideas compared with group methods Easy to transmit biasing cues
Not-at-homes
Broad coverage often infeasible
Cost per contact high
Data collection time may be excessive

Comparison of Data Collection Methods Used in Marketing Research
Method Advantages Disadvantages
Projective
techniques Useful in word association tests of new brand names
Less threatening to respondents for sensitive topics
Can identify important motives underlying choices Require trained interviewers
Cost per interview high
Mall intercepts Flexibility in collecting data, answering questions, probing respondents
Data collected quickly
Excellent for concept tests, copy evaluations, other visuals
Fairly high response rates Limited time
Sample composition or representativeness is suspect
Costs depend on incidence rates
Interviewer supervision difficult

Comparison of Data Collection Methods Used in Marketing Research
Method Advantages Disadvantages
Internet surveys Inexpensive, quickly executed
Visual stimuli can be evaluated
Real-time data processing possible
Can be answered at convenience of respondent Responses must be checked for duplication, bogus responses
Respondent self-selection bias
Limited ability to qualify respondents and confirm responses
Difficulty in generating sample frames for probability sampling
Observation Can collect sensitive data
Accuracy of measuring overt behaviors
Different perspective than survey self-reports
Useful in studies of cross-cultural differences Appropriate only for frequently occurring behaviors
Unable to assess opinions of attitudes causing behaviors
May be expensive in data-collection-time costs

Company versus Contract Research
Many marketing research firms, advertising agencies, and consulting companies do marketing research on a contract basis
Considerations
Schedules for task completion
Exact responsibilities of all involved parties
Cost

Performance of Research
Preparing for data collection and actually collecting them
Depends on:
Type of research selected
Type of data needed
Cardinal rule – Obtain and record the maximal amount of useful information subject to the constraints of time, money, and respondent privacy

Processing of Research Data
Preparation of data for analysis and their actual analysis
Includes editing and structuring data, and coding them for analysis
Analysis techniques depend on:
Nature of the research question
Design of the research
Interpreting and assessing the research results is critical

Preparation of Research Report
Research report – Complete statement of everything done in a research project
Write-up of all stages
Strategic recommendations from the research
Limitations of the research
Clear and unambiguous report with respect to what was done and recommended

Figure 2.4 – Eight Criteria for Evaluating Marketing Research Reports

Limitations of the Research Process
Test marketing: Measures new product sales on a limited basis
Competitive retaliation and other factors are allowed to operate freely
Future sales potential can be estimated

Limitations of Test Marketing Study Results
Test market areas are not representative of the market
Sample size and design are incorrectly formulated
Pretest measurements of competitive brand sales are not made or are inaccurate
Test scores do not give complete support to the study
Test market products are advertised or promoted beyond a profitable level
Effects of factors that influence sales are ignored in the research
Test-market period is short to determine whether the product will be repurchased

Marketing Information Systems
Marketing decision support system – Coordinated collection of data, tools, and techniques involving both computer hardware and software
Popular form of marketing information system
Used to gather and interpret relevant information for decision making

Marketing Decision Support Systems: Requirements
Database management software
Sorts and retrieves data from internal and external sources
Model base management software
Contains routines for manipulating data
Dialog system
Permits marketers to explore databases and use models to produce information

Marketing Decision Support Systems: Design
Design handles information from both internal and external sources
Internal information – Sales records, inventory data, or expenditure data
External information – Changes in environment that could influence marketing strategies

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