Chapter 11 Principals Of Marketing - Faculty.piercecollege.edu

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11-18 Marketing Strategy [CH 11 Figure 11.10 Bases for Market Segmentation Demographic Consumer Markets Industrial Markets Geographic Psychographic Benefit Geographic Product End-Use to 8-year-olds and creates television commercials aimed at this age group. Marketing aimed at children not only emphasizes their current roles as consumers, but is also intended to build loyalty. First Women's Bank in New York opened a bank for children in the F.A.O. Schwartz toy store. The president of First Women's says, "What better way to build loyalty to a bank than to get them while they are young." A similar strategy inspired the U.S. Army, Marines, and Air Force to place ads in children's magazines such as Boys' Life and Scholastic. 16 Geographic Segmentation. Marketers often study population data in their efforts to segment markets. In fact, geographic segmentation is one of the oldest segmentation bases available. It can be extremely useful when consumer preferences and purchase patterns for a product or service differ along regional lines. But one of the problems marketers face is that marketplaces keep shifting. For instance, there has been a decided movement in the U.S. population to the Sunbelt and coastal areas and westward. Campbell Soup Company is an example of a consumer products firm that segments markets by geographic location. Campbell divides the country into 22 geographic regions and develops products and promotions targeted at each defined area. Region-specific products include creole soup, which is sold only in the South, and red-bean soup, which is marketed in areas with large populations of Hispanics. Because beer drinkers' tastes vary considerably in different parts of the country, G. Heileman Brewing Company markets a number of regional brands and develops advertising for each region. In Pittsburgh, Heileman promotes its Iron City beer with the campaign theme "You Can't Keep an Iron Man Down." Heileman takes a different approach in the southern half of Texas, an area hard-hit by recession, by using the theme "The Lone Star Is on the Rise Again" to promote its Lone Star brand. 17 Psychographic Segmentation. Psychographic segmentation uses behavioral and life-style profiles to segment markets. Psychographic analysis seeks to further define the various groups of individuals in American society. This enables firms to tailor their marketing approach to a carefully chosen market segment. SRI International, a marketing research firm, conducted a study to identify lifestyle
CH 11] Business 101 — The Basics 11-19 categories that would be useful in market segmentation. The resulting Values and Lifestyles Program (VALS) categorizes individuals into nine life-styles: survivors, sustainers, belongers, emulators, achievers, I-am-me, experiential, societally conscious, and integrated. 18 St. Rose Hospital of Hayward, California, decided to use the VALS concept of segmentation when consumer research indicated advertisements for its new emergency-room services were ineffective. The hospital learned that the ads, which focused on the speed and cost of service, meant little to potential customers. St. Rose's market is dominated by "belongers," people who have traditional values and are intensely patriotic and sentimental. They respond to ads that soothe their anxiety and emphasize the predictability of health-care service. Armed with this knowledge, St. Rose developed a direct-mail advertising campaign that emphasized how many years the hospital had been in business and used the reassuring theme of the hospital's ability to keep "small worries from growing into big ones." The new campaign appealed to the target audience and quickly improved the hospital's business and enhanced its image. 19 Benefit Segmentation. Market segments may also be identified by the benefits buyers may expect to derive from a good or service. In recent years, socks have become a fashion item, and many sock makers now market their goods as a fashion accessory. But Foot-Joy's brand of Joy Walker Socks offers a benefit that targets a market segment more concerned about foot comfort than fashion. In the advertisement in Figure 11.11, the company admits its socks are ugly but explains how they are designed to improve circulation, thus promising consumers the benefit of foot comfort. When differences among competing goods or services are slight, firms may tailor their promotions to highlight benefits that appeal to a certain market segment. Advertising by U.S. airlines takes this approach. In targeting business travelers, American Airlines created advertisements promoting its dependable, on-time performance. In the ads, American refers to itself as the "on-time machine" and reports it has the fewest delayed flights of all major airlines. By contrast, United Air Lines targets business travelers with a campaign theme focusing on customer service— "Rededicated to giving you the service you deserve." The benefit that US Air offers to business travelers is frequent scheduling of flights to key destinations. 20 Segmenting Industrial Markets It is also possible to use market segmentation in industrial markets. The procedure is similar to that employed in consumer markets, where the bulk of the research has been conducted. The three approaches to industrial market segmentation are geographic segmentation, product segmentation, and segmentation by end-use application. Geographic segmentation would be useful in geographically concentrated industries like aircraft manufacturing. Product segmentation refers to developing products to meet specific buyer requirements, such as the purchase of police cars. Segmentation by end-use application considers how the buyer will use the product or service. For instance, Northrop's F-20 was designed for export to nations that wanted a low-cost, general-purpose fighter aircraft. Unfortunately for the manufacturer, the F-20 did not find any overseas customers. Segmentation is a market tool of growing importance in industrial markets. Figure 11.11 Segmenting Markets by Product Benefits
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