Market Segmentation and Real Time Bidding

Consumer Behavior
Twelfth Edition
Chapter 2
Market Segmentation
Learning Objectives
2.1 To understand how to segment markets along demographics,
lifestyles, product benefits and usage, and media exposure.
2.2 To understand how to identify, select, and reach target
markets.
2.3 To understand real-time bidding as compared with market
segmentation.
Copyright © 2019, 2015, 2010 Pearson Education, Inc. All Rights Reserved
What Kind of
Consumer Does This Ad Target?
3 Chapter Three Slide
This Ad Targets Runners Who Are Physically
Active People and Also Relish the Outdoors.
Usage-Occasion Segmentation
Source: Mack’s® is a registered trademark of Mckeon Products, Inc.

Learning Objective 2.1
2.1 To understand how to segment markets along demographics,
lifestyles, product benefits and usage, and media exposure.
STP
• Market Segmentation is the process of dividing a market into
subsets of consumers with common needs or characteristics
that are different from those shared by other groups.
• Targeting consists of selecting the segments that the company
views as prospective customers and pursuing them.
• Positioning is the process by which a company creates a
distinct image and identity for its products, services, and
brands in consumers’ minds.
– The image differentiates the company’s offering from
competition by communicating to the target audience that
the product, service or brand fulfills their needs better
than alternatives.
– This image can be refreshed through product
repositioning.
Why Segmentation is Necessary
• Consumer needs
differs
• Differentiation helps
products compete
• Segmentation helps
identify media
Chapter Three Slide 8

Two Types of Shared Characteristics
1. Quantitative factors (Behavioral Data)

• Consumer-intrinsic
• Consumption-based
2. Cognitive factors
• Consumer-intrinsic
• Consumption-specific
1. Quantitative factors (Behavioral Data)

– Consumer-intrinsic
▪ a person’s age, gender, marital status, income,
and education
– Consumption-based
▪ the quantity of product purchased, frequency
of leisure activities, or frequency of buying a
given product.
2. Cognitive factors
– Consumer-intrinsic
▪ personality traits, cultural values, and
attitudes towards politics and social
issues.
– Consumption-specific
▪ specific attitudes and preferences, such
as the benefits sought in products and
attitudes regarding shopping.
Bases for Segmentation
(Objective/Known
& Measurable)
(Subjective /
Abstract)

Demographic Segmentation :
Core of all segmentations
•  easy and logical,
cost-effective way to reach segments, and
demographic shifts are easier to identify than other types of
shifts
• Age
• Gender
• Marital Status
• Household type and Size
• Income and Wealth; Occupation
• Geographical location
Age
• Age influences buying priorities
• Marketers target age groups
• Example: movie studios compete for teens and young adults
each summer
Gender
• Gender roles have blurred
• Gender less accurate to distinguish among consumers in some
product categories than it used to be
• Some ads depict men and women in roles traditionally
occupied by the opposite gender
• Some products (e.g. skin care and snacks) are marketed
differently to men and women
Households
• Family life cycle
– marital status,
– the size of the family,
– age of family members,
– employment status of the head of the household
• Important occasions change consumption patterns
Social Standing
• Social class
• Fluctuations affect marketing
Ethnicity
• Members of the same culture often share the same values,
beliefs, and customs.
• Marketers may target culturally distinct segments with the
same product using different promotional appeals.
Psychographics
Defined
Consumers’ lifestyles, which include consumers’ activities,
interests, and opinions
Table 2.1 Psychographic Measures (1 of 2)
Psychographic Statements
Personal I have a sense of belonging.
Values* I seek fun and enjoyment in life.
I am self-fulfilled.
Financial security is important to me.
My greatest achievements are ahead of me.
I am more conventional than experimental.
My social status is an important part of my life.
Apparel and I buy clothes I like regardless of current fashion.

Fashion* My friends often ask me for advice on fashion.
Men do not notice women who do not dress well.
Table 2.1 Psychographic Measures (2 of 2)
Psychographic Statements
Gift Giving* I generally give gifts because people expect me to.
I try to give gifts that carry personal messages to recipients.
Gifts always communicate love and friendship.
Personal I find it hard to speak in front of a group.
Relationships* When I make friends I always try to make the relationships work.
I enjoy making my own decisions.
Others usually know what’s best for me.
Buying Online* It requires too much time to set up accounts with online stores.
The look of a website is an important factor in my buying decisions.
I tell others about my experiences in buying online.
At Leisure** Played adult games (e.g., cards or mahjong)
Visited art gallery or museum
Went hunting or shooting
Went to the movies
Attended a sporting event
* Responses on a “strongly agree” to “strongly disagree” scale

** Responses indicate the number of times respondents had engaged in the activity during the past 6 months.
VALS™
VALS – Value and Life Style
Education
Income
Self Confidence
Health,
Eagerness
Energy
Knowledge & Success to peers Variety Seeking, Risk,

Principles Social and Physical Activity
Geodemographic Segmentation
• PRIZM ® Classifies 66 demographically and behaviorally distinct segments
– Location, demographics, and consumer behavior
– Lifestage groups
– Urbanization and affluence
– ConneXions
– P$YCL E
Benefit Segmentation
• Benefits sought represent
consumer needs (e.g. Any Product)
– Functional (quality)
– Value for money
– Social benefit
– Positive emotional benefit…
• Important for positioning
Source: Campbell Soup Company
Expectations of Service Providers :
Dentists, hairdressers, travel agents, and financial firms
• Social Benefits
– Recognized/known by staff
– Treated in a way that they feel important/friendship
• Special Treatment Benefits
– Helping when something goes wrong
– Receiving priority treatment
• Confidence-Related Benefits
– Feel confident service will be provided correctly
– Clear descriptions of services and what to expect
Product Usage
• Usage rate
– Heavy/Medium/Light Users
▪ E.g. Light Beer to Heavy Drinkers , Positioned as
“Less Filling”
– Awareness status
▪ Degree of awareness/ interest in product/readiness to
buy/unaware
– Level of involvement
▪ High v/s Low
Hybrid Segmentation : Marketers Combine Factors
• Demographics determine needs for products
• Psychographics explain buyers’ purchase decisions and
choices
• Demographic= WHO
• Psychographic= WHY
2.2 To understand how to identify, select, and reach target
markets.
Criteria for Effective Targeting
Identifiabl
e
Sizeable Stable
Congruent with the
Accessible company’s objectives
and resources

Reachable Market Segments
Mobile Targeting
• Showrooming
• Geofencing
• Websites are versatile
2.3 To understand real-time bidding as compared with market
segmentation.
Real-Time Bidding (RTB)
Defined
A technique that allows advertisers to reach the right user in the
right place at the right time, which also sets the price advertisers
pay per impression or action
Web Crawlers
Defined
Programs that capture content across the internet and transmit it
to the data broker’s servers
Predictive Analytics
Defined
Measures that predict consumers’ future purchases on the bases
of past buying information and other data, and also evaluate the
impact of personalized promotions stemming from the
predictions.
Application: Target
Ad Exchange
Defined
A big pool of ad impressions – websites – paste their ad
impressions into the pool, hoping someone will buy them

Market Segmentation and Real Time Bidding

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Consumer Behavior

Source: Mack’s® is a registered trademark of Mckeon Products, Inc.

Chapter Three Slide 8

1. Quantitative factors (Behavioral Data)

1. Quantitative factors (Behavioral Data)

Chapter Three Slide 12

Apparel and I buy clothes I like regardless of current fashion.

* Responses on a “strongly agree” to “strongly disagree” scale

Knowledge & Success to peers Variety Seeking, Risk,

Source: Campbell Soup Company

Chapter Three Slide 31

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