Segmentation: Target Marketing

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Segmentation/Targeting and Positioning
Key marketing strategy decision making: How to divide up markets into meaningful customer groups (market segmentation), choose which customer groups to serve (target marketing), and created marketing offers that best serve targeted customers (positioning). A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. First Segmentation Example:

1 Sony
2 Instead of product managers, now managers are champions of demographic and psychographic segments 3 Affluent
4 CE Alphas (early adopters of technology at any age)
5 Zoomers (55+)
6 SoHo (Small office/Home office)
7 Families (35 to 54)
8 Young Professionals /DINKs (Double Income, No Kids; 25 to 34) 9 Gen Y (under 25)

Sony is looking at Boomers and Zoomers
1 In ’06, Sony learned that women make the household purchasing decisions on electronics 53% of the time; they decided it was time for a marketing makeover. "On the traditional level in the consumer electronics space, we’ve marketed to the male," says Barbara Miller, Director Corporate Web Services for Sony Electronics. "Our decision was that we needed to do a better job of addressing a female audience as well."

1 Marketing Surprise: Older shoppers buy too.
2 Consumer interviewed in WSJ and information from U.S. Census (4/6/2004) said, “Instead of repairing her car she was going to buy a Sony digital camcorder.

1 The TV spot said to her, "When your kids ask where the money went, show them the tape.” 2 As we get older there is less advertising to us and we stop getting attention. “But we still spend a lot of money.”

“Alpha Moms”: This new marketing target (replacing “Soccer Moms” and “Yoga Moms’) is an educated, tech savvy multitasker who views motherhood as a “job that can be mastered with diligent research.” She’s online 87 minutes a day, and spends 7% more than the typical Internet user. Currently targeting her: Nintendo (Wii), GM (Escalade), Kimberly-Clark (Huggies), and P&G (Swiffer). USA Today.4/11/2007 AARP and RoperASW found for most products the majority of people over 45 years of age aren’t loyal to a single brand. • 73 million American who are 50 or older controlled 67% of the U.S. wealth. • Median net worth for U.S. households:

o 75 and older: $100,100
o 70-74: $120,000
o 65-69: $114,050
o 55-64: $112, 048 (15x the figure for under 34)
o 45-54: $ 83,150
o 35-44: $44,275
o 34 and younger: $7,240
2

1 Bloomie's has a taste for "yummy mommies" and believes it can capture a segment of the market that has tripped up Gymboree, Gap and American Eagle Outfitters: 35-to-45-year-old moms. The upscale department store has launched a special in-store boutique dubbed Quotation to cater to so-called "yummy mommies," women who are upper-middle class and suburban and want to be casual but stylish. BusinessWeek (4/07)

1 Smokers: 42% of non high school graduates; 12% of college graduates and 7% of graduate degrees. How do these numbers affect targeting and promotion? 2 Safeway offers secure POS (point of sale or point of service) for visually impaired. Technology that provides tactile keys for visually impaired customers and helps protect their privacy. The devices are in all of the retailer's California stores and will be installed across its entire portfolio in the next 12 months. Progressive Grocer 11/1/06

• The world’s best companies are setting their sights on older consumers. These consumers are not poor, frugal or struck in a rut buying the same brand. o Walt Disney has a program aimed at 50+ called “Magical Gatherings.” It allows customers to use the web and plan trips with golfing buddies, old schoolmates or their grandchildren. o Microsoft has software tools with easier to read text, audio alerts, and mouse alternatives for older workers with sight, hearing or wrist problems. o Target stores are...
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