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How does Qantas position its offering for different

market segments?

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Market Segmentation
The process of dividing a potential
market into distinct subsets of
consumers and selecting one or
more segments as a target
market to be reached with a
distinct marketing mix.
• Who uses segmentation?
– Marketers of consumer goods
– Hotels
– Industrial Manufacturers
– Not-for-profit Organizations
 Table 3.1 Market Segmentation

SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES

Geographic Segmentation
Region Southwest, Mountain States, Alaska, Hawaii
City Size Major metropolitan areas, small cities, towns
Density of area Urban, suburban, exurban, rural
Climate Temperate, hot, humid, rainy
Demographic Segmentation
Age Under 12, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+
Sex Male, female
Marital status Single, married, divorced, living together, widowed
Income Under $25,000, $25,000-$34,999, $35,000-$49,999,
$50,000-$74,999, $75,000-$99,999, $100,000 and over
Education Some high school, high school graduate, some college,
college graduate, postgraduate
Occupation Professional, blue-collar, white-collar, agricultural,
military

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 Table 3.1, continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Psychological Segmentation
Needs-motivation Shelter, safety, security, affection, sense of self-worth
Personality Extroverts, novelty seeker, aggressives, innovators
Perception Low-risk, moderate-risk, high-risk
Learning-involvement Low-involvement, high-involvement
Attitudes Positive attitude, negative attitude
Psychographic
(Lifestyle) Segmentation Economy-minded, couch potatoes, outdoors enthusiasts,
status seekers
Sociocultural Segmentation
Cultures American, Italian, Chinese, Mexican, French, Pakistani
Religion Catholic, Protestant, Jewish, Moslem, other
Subcultures (Race/ethnic) African American, Caucasian, Asian, Hispanic
Social class Lower, middle, upper
Family life cycle Bachelors, young married, full nesters, empty nesters

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 Table 3.1, continued
SEGMENTATION BASE SELECTED SEGMENTATION VARIABLES
Use-Related Segmentation
Usage rate Heavy users, medium users, light users, non users
Awareness status Unaware, aware, interested, enthusiastic
Brand loyalty None, some, strong
Use-Situation Segmentation
Time Leisure, work, rush, morning, night
Objective Personal, gift, snack, fun, achievement
Location Home, work, friend’s home, in-store
Person Self, family members, friends, boss, peers
Benefit Segmentation Convenience, social acceptance, long lasting, economy,
value-for-the-money
Hybrid Segmentation
Demographic/ Combination of demographic and psychographic profiles
Psychographics of consumer segments profiles
PRIZM NE “Movers & Shakers,” “New Empty Nests,” “Boomtown
Geodemographics Singles,” “Bedrock America”
SRI VALSTM Innovators, Thinkers, Believer, Achievers, Strivers,
Experiencer, Makers, Survivors

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 CRITERIA FOR EFFECTIVE TARGETING
• There are five criteria for effective targeting, as
shown on the slide.
– Identifiable - This means that the marketer must be able to
see or find the characteristic they have chosen for
segmentation.
– Sizeable - It must be large enough to be profitable to the
marketer.
– stable - segment means that the consumers are not
“fickle” and likely to change very quickly.
– A group of consumers must be accessible to be targeted.
The marketer must be able to reach that market in an
affordable way.
– Finally, the target must be congruent with the company’s
objectives and resources.
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 DEMOGRAPHIC SEGMENTATION

Age Gender Marital Status

Income and
Household Geographical
Wealth;
type and Size location
Occupation

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What type of demographic segmentation
is reflected by this ad?
 AGE
• Age effects
–occurrences due
to chronological
age
• Cohort effects
–occurrences due
to growing up
during a specific
time period
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 SEX
• Traditional roles of men and women in
purchases
• Changing sex roles
– Dual-income households
• Working women less accessible
through traditional media

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 MARITAL STATUS
• Households as a
consuming unit
–Singles
–Divorced
–Single parents
–Dual-income
married

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INCOME, EDUCATION, AND OCCUPATION
• Income often combined with other variables
for segmentation
• The three variables tend to be correlated

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 GEO-DEMOGRAPHIC SEGMENTATION
• Based on geography and
demographics
• People who live close to
one another are similar in
tastes, incomes, lifestyles
and consumption.
• They might eat similar
foods, like the same
movies, and take the same
types of vacations.
• “Birds of a same feather
flock together”
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 Psychographics

Consumers’ lifestyles, which

include consumers’ activities,
interests, and opinions

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VALS FRAMEWORK

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 VALS FRAMEWORK
• Innovators. These consumers are on the leading edge of change, have the highest incomes, and such high self-esteem
and abundant resources that they can indulge in any or all self-orientations. They are located above the rectangle.
Image is important to them as an expression of taste, independence, and character. Their consumer choices are
directed toward the "finer things in life."
• Thinkers. These consumers are the high-resource group of those who are motivated by ideals. They are mature,
responsible, well-educated professionals. Their leisure activities center on their homes, but they are well informed
about what goes on in the world and are open to new ideas and social change. They have high incomes but are practical
consumers and rational decision makers. (Ariel – intelligent – value addition)
• Believers. These consumers are the low-resource group of those who are motivated by ideals. They
are conservative and predictable consumers who favor local products and established brands. Their lives are centered
on family, community, and the nation. They have modest incomes. (Surf excel - persuasion)
• Achievers. These consumers are the high-resource group of those who are motivated by achievement. They are
successful work-oriented people who get their satisfaction from their jobs and families. They are politically
conservative and respect authority and the status quo. They favor established products and services that show off their
success to their peers. (Surf – get something done)
• Strivers. These consumers are the low-resource group of those who are motivated by achievements. They have values
very similar to achievers but have fewer economic, social, and psychological resources. Style is extremely important to
them as they strive to emulate people they admire. (Wheel – buzz word fragrance)
• Experiencers. These consumers are the high-resource group of those who are motivated by self-expression. They are
the youngest of all the segments, with a median age of 25. They have a lot of energy, which they pour into physical
exercise and social activities. They are avid consumers, spending heavily on clothing, fast-foods, music, and other
youthful favorites, with particular emphasis on new products and services.
• Makers. These consumers are the low-resource group of those who are motivated by self-expression. They are
practical people who value self-sufficiency. They are focused on the familiar - family, work, and physical recreation - and
have little interest in the broader world. As consumers, they appreciate practical and functional products. (Rin – self-
sufficient)
• Survivors. These consumers have the lowest incomes. They have too few resources to be included in any consumer
self-orientation and are thus located below the rectangle. They are the oldest of all the segments, with a median age of
61. Within their limited means, they tend to be brand-loyal consumers. (Tide)

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BENEFIT SEGMENTATION

Segmenting on
the basis of the
most important
and meaningful
benefit

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 BENEFIT SEGMENTATION
• Segmenting on the basis
of the most important
benefit sought by
consumers when
purchasing the product or
service
– Toothpaste can be bought
for
• Good Taste (e.g., Colgate)
• Fresh Breath (e.g, Close Up)
• White Teeth (e.g,
Pepsodent)
• Sensitive care (e.g.,
Sensodyne)
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USE-RELATED SEGMENTATION
• Rate of Usage
– Heavy vs. Light
• Heineken attracts the heavy
drinkers
• Awareness Status
– Aware vs. Unaware
• Awareness – interest –
readiness – inform
• “Zindigi ki saath bhi, zindigi
ki baad bhi”
• Brand Loyalty
– Brand Loyal vs. Brand
Switchers
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USAGE-SITUATION SEGMENTATION
• Segmenting on the basis of special occasions or situations

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Copyright © 2015 Pearson Education Slide 24 of 35
 Positioning
The process by
which a company
creates a distinct
image and identity
for its products,
services, or brands
in consumers’
minds.

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