Segmenting and Targeting The Audience

Chapter 5:
Segmenting and
Targeting the Audience
Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

5-1
Questions to Explore
1. How does the consumer decision process work?
2. What cultural, psychological, and behavioral

influences affect consumer responses to
advertising?
3. How does targeting work and how is it different

from segmenting?
4. What characteristics are used to segment groups of

consumers?

5-2
Starting the Conversation
 There are more than 315 million people in the
United States.
 For every brand, some are more likely to be

interested than others.
 Messages cost money both to send and to

receive.
 How do you find prospects, and how do you

start the conversation with them?

5-3
How do consumers
make brand decisions?
The traditional view:
1. Need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase evaluation
 The purchase may be low-involvement or high-

involvement.
 In low involvement, there’s little or no information
search.
Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-4

Paths to a brand decision
 The path depends on the type of product and the
buying situation.
 Not all responses begin with thinking about a

product.
 Not all responses follow the same route to a

decision.
 Brand planners need to know how the decision

process works for a specific product category.

What Influences Consumer
Decisions?

What is consumer behavior?
Consumer behavior describes how individuals

and groups select, purchase, use, or dispose
of products, and the needs and wants that
motivate behaviors.

5-7
Cultural influences
Norms and Values
 Norms: a culture’s boundaries for “proper”
behavior
 Values: the source of norms which represent

underlying belief systems
 Core values: govern people’s attitudes and

guide their behavior

Cultural influences
Ten basic core values
1. A sense of belonging 6. Respect from others
2. Excitement 7. A sense of
accomplishment
3. Fun and enjoyment
8. Security
4. Warm relationships
9. Self-respect
5. Self-fulfillment
10.Thrift

5-9
Cultural influences
Corporate culture
 Some are formal with lots of procedures, rigid work
hours, and dress codes.
 Others are more informal in terms of their

operations, office rules, and communication.
 The same patterns exist in the way businesses make

purchasing decisions.

Social influences
Social Class
Your position in society, which may be determined by:
1. Income
2. Wealth
3. Education
4. Occupation
5. Family prestige
6. Value of home
7. Neighborhood

5-11
Social influences
Reference Groups
Groups we use for models for behavior, such as:
1. Teachers
2. Religious leaders
3. Political parties
4. Religious groups
5. Ethnic organizations
6. Hobby-based clubs
7. Fellow workers or students

5-12
Social influences
Brand communities
Groups of people devoted to a particular brand.
 For consumers, reference groups:

1. provide information
2. serve as a means of personal comparison
3. offer guidance

5-13
Social influences
Family
 People related by blood, marriage, or adoption
who live in the same household.
 A household consists of all those who occupy a

dwelling, related or not.
 In the 21st century, one-person households

outnumber married couples with children.

5-14
Psychological influences
Needs and Wants
 Needs are motivated by basic survival instincts.

 Wants are what we desire.
“In some cases, we want things just for the sheer fun of
newness — think about how many pairs of shoes or the
amount of clothes people have.”
-- Account planner Susan Mendelsohn

5-15
Successful brands satisfy the need to:
1. Feel safe and secure 6. Grow, become more
2. Feel comfortable 7. Serve others

and give back
3. Be cared for and
connected to others 8. Be surprised
and excited
4. Be desired by others
9. Believe there is a
5. Be free to do what we higher purpose
want
10. Feel they matter

 Maslow’s Hierarchy of Needs

 Satisfaction
This is only one possible response to a brand
message or brand experience.
 Dissonance
Cognitive dissonance refers to a conflict between
thoughts. This creates a state of tension.
 Motivation
A motive is an internal force that stimulates you
to behave in a certain manner.

5-18
The motivation is obvious for a product that helps

you avoid catching a cold when you travel.
Do you think it is effective to also feature the

motivation of the product’s creator?

5-19
Influences on B2B decision making
 Many individuals involved; decision by committee
 Rational and quantitative criteria dominate
 Often based on specs to those who bid on the contract
 Long time between initial contact and decision
 Quality is important; repeat purchases based on performance
 Personal selling is important

How do we Segment
Markets and Target Audiences?

Segmentation strategies
 Segmenting
Dividing the market into groups of people who
have similar characteristics in certain key product-
related areas.
 Market segmentation
An approach to more precisely match customer
needs and wants with products.
 Niche markets
Tighter subsegments of a more general market
segment.

Types of segmentation
 Demographic segmentation
Divided by age, gender, ethnicity, income.
 Life-stage segmentation
Based on a stage in the consumers’ life cycle.
 Geographic segmentation
Uses location as a defining variable.

Segmentation strategies
 Psychographic segmentation
Based on how people spend their money, their
interests and opinions, and views of themselves.
 Behavioral segmentation
Based on product category and brand usage.
 Values and benefits-based segmentation

Based on underlying values or consumers’ needs
and problems.

Profiling Markets and
Target Audiences

One of advertising’s
most familiar slogans
moved women who were
tired of being told that
there are things ladies
don’t do, such as color
their hair.
What lesson can you

learn from a successful
ad like this?

Demographics
Demographics
Statistical, social, economic characteristics including:
1. Age
2. Gender and sexual orientation
3. Education, occupation and income
4. Race, ethnicity, and immigration status
5. Geography
6. Religion
Let’s look at each one in depth……

Demographics
Age
This is the most important demographic
characteristic used by marcom planners.
Age-related population categories:

• The Greatest Generation • Gen X
• The Silent Generation • Me Generation
• Baby Boomers • Generation Y
• Generation Jones • Millennials

Demographics
Gender and sexual orientation
 Women account for about 85 percent of all

consumer purchases in the United States.
 Many brands are either masculine or feminine in

terms of use.
 Sexual orientation has become a marketing issue as

gay and lesbian consumers have become serious
target markets.

Demographics
Education, occupation, and income
 Generally, white U.S. consumers attain higher levels of
education than blacks and Latinos.
 Occupation is key because most people identify

themselves by what they do.
 Income data from the 2011 census showed a shift

toward fewer people in the top third and more people
in the bottom third.
 Advertisers are especially interested in consumers’

discretionary income.

Demographics
Race, ethnicity and immigration status
 In the U.S., ethnicity is a major segmentation factor.
 The United States is more multicultural than ever.
 Smart multicultural strategies recognize these trends.
 Media use differences may be based on ethnicity.

Demographics
Geography
 People residing in different regions need certain
products.
 Media planners use designated market areas (DMAs)

to describe certain media markets.

Demographics
Religion
 Here, culture and demographics come together.
 Some religions forbid certain products.
As a class:
What are some examples?
What does this imply for advertisers?

Targeting and profiling
using psychographics
Psychographics refer to lifestyle and
psychological characteristics including:
 Activities
 Values
 Interests
 Attitudes
 Opinions

Psychographics
Attitudes
An attitude is a predisposition that reflects an:
 opinion
 emotion
 mental state
……directed at some
 object
 person
 idea

Psychographics
Lifestyles
Lifestyles can be analyzed in terms of:
 Patterns of consumption
 Personal relationships
 Interests
 Leisure activities

Psychographics
Lifestyles
The Yankelovich MONITOR™ MindBase™ identifies eight
consumer groups:
 “I am Expressive”
 “I am Down to Earth”
 “I am Driven”
 “I am Sophisticated”
 “I am at Capacity”
 “I Measure Twice”
 “I am Rock Steady”
 “I am Devoted”
Check this company out at www.thefuturescompany.com

Psychographics
Lifestyles
The VALS™ system categorizes
consumers according to
psychological traits:
 Thinkers and Believers

motivated by ideals
 Achievers and Strivers

motivated by achievement
 Experiencers and Makers

motivated by self-expression

Psychographics
Sociodemographic segments
This approach refers to people in terms of when they
were born.
As a class:
Try to figure out who these labels describe:
• Dinkies • Ruppies
• Guppies • Mini-Me
• Skippies

Psychographics
Trends and fads
 Related to lifestyle and psychographic factors, and
the fascination with choice in a consumer culture.
 Young people are particularly involved in trends.
 Trend spotters: researchers that identify trends

affecting consumer behavior.
 Cool hunters: specialize in identifying trendy fads

that appeal to young people.

Targeting and profiling
using behavioral patterns
Brand usage and experiences
 Usage rate: quantity or purchase — light, medium, or
heavy.
 Experiences: our decisions are based on our

experience with the brand.
 Innovation and adoption: how willing people are to try

something new.
 Perceived risk: what you have to gain or lose by trying

something new.

Seeking seekers
 Segmenting and targeting works differently in the
21st century.
 The importance of word of mouth has increased.
 Companies are much more involved in listening

and responding to consumers.
 We not only need to rethink targeting, but also the

way consumers interact with brands.

Seeking seekers
The targeting strategy for seekers focuses on:
1. Information: A search for specific content—Where can I get

the lightest notebook computer? How do I return a product
and get a refund?
2. Interaction: Friends, fellowship, belonging, respect and

admiration, or something to talk about and share.
3. Entertainment, experiences, and stimulation: Surprises,

challenges, love and liking, happiness, rewards, something to
believe, the newest thing, ways to be smarter, more attractive.

Seeking seekers
Targeting and response strategies
Targeting:
1. New customers
2. Current customers
3. Seekers of product information
4. Seekers of interaction
5. Seekers of experiences and stimulation
Response:
6. Connect with those who respond to a brand message.
7. Connect, respond to those who initiate contact with brand.

Ethical issues
Examples:
 Advertising potentially unhealthy products to
specific segments like sugary foods to children.
 Emphasis on advertising to young consumers,

while ignoring the 78 million Boomers now in
their “power years.”

Segmenting and Targeting The Audience

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Chapter 5:

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

2. What cultural, psychological, and behavioral

3. How does targeting work and how is it different

4. What characteristics are used to segment groups of

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 For every brand, some are more likely to be

 Messages cost money both to send and to

 How do you find prospects, and how do you

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 The purchase may be low-involvement or high-

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-4

 Not all responses begin with thinking about a

 Not all responses follow the same route to a

 Brand planners need to know how the decision

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-5

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-6

Consumer behavior describes how individuals

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 Values: the source of norms which represent

 Core values: govern people’s attitudes and

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-8

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

hours, and dress codes.

 Others are more informal in terms of their

 The same patterns exist in the way businesses make

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-10

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 For consumers, reference groups:

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 A household consists of all those who occupy a

 In the 21st century, one-person households

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 Needs are motivated by basic survival instincts.

-- Account planner Susan Mendelsohn

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

2. Feel comfortable 7. Serve others

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-16

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-17

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

The motivation is obvious for a product that helps

Do you think it is effective to also feature the

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall

 Rational and quantitative criteria dominate

 Often based on specs to those who bid on the contract

 Long time between initial contact and decision

 Quality is important; repeat purchases based on performance

 Personal selling is important

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 5-20

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-21

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-22

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-23

 Values and benefits-based segmentation

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-24

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-25

What lesson can you

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-26

Let’s look at each one in depth……

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-27

Age-related population categories:

Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 5-28

 Women account for about 85 percent of all