This is a€?Market Segmenting, Targeting, and Positioninga€?, chapter 5 from the book Marketing Principles (v. This content was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz in an effort to preserve the availability of this book. PDF copies of this book were generated using Prince, a great tool for making PDFs out of HTML and CSS. For more information on the source of this book, or why it is available for free, please see the project's home page. DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.
Your goal is to figure out which people and organizations are interested in your product ideas.
Distinguish between targeted marketing and mass marketing and explain what led to the rise of each. The segment(s) or group(s) of people and organizations you decide to sell to is called a target marketThe select group of people you choose to sell to.. The story of General Motors raises an important point, which is that segmenting and targeting markets doesna€™t necessarily mean a€?skinnying downa€? the number of your customers. Getting a read on potential target markets doesna€™t necessarily have to involve technology. Healthy Choice frozen dinners were conceived as a result of questioning potential customers. Finding and attracting new customers is generally far more difficult than retaining your current customers.
Finding new customers, getting to know them, and figuring out what they really want is also a difficult process, one thata€™s fraught with trial and error. In 2009, Backroads, a California company focused on adventure-based travel increased its revenues by creating a personalized marketing campaign for people who had done business with them in the past.
In addition to studying their buying patterns, firms also try to get a better understanding of their customers by surveying them or hiring marketing research firms to do so or by utilizing loyalty programs. Twitter is another way companies are keeping in touch with their customers and boosting their revenues. Many firms, even small ones, are using Facebook to develop closer relationships with their customers.
Regardless of how well companies know their customers, ita€™s important to remember that some customers are highly profitable, others arena€™t, and others actually end up costing your firm money to serve. One-to-one marketing is an idea proposed by Don Peppers and Martha Rogers in their 1994 book The One to One Future. Listen to Apurva Ghelani, a senior sales engineer, from the marketing company Air2Web, discuss how companies like NASCAR get permission from consumers to send them advertisements via their wireless devices. Choosing select groups of people to sell to is called target marketing, or differentiated marketing. Using the shotgun and rifle analogy, how do mass marketing, targeted marketing, and one-to-one marketing compare with one another?
Outline the steps companies need to take to engage in one-to-one marketing with their customers. Sellers can choose to pursue consumer markets, business-to-business (B2B) markets, or both. Table 5.1 "Common Ways of Segmenting Buyers" shows some of the different types of buyer characteristics used to segment markets.
Behavioral segmentationDividing people and organization into groups according to how they behave with or act toward products.
Watch the YouTube video to see a vintage Colgate toothpaste ad that describes the producta€™s various benefits to consumers. Another way in which businesses segment buyers is by their usage ratesa€”that is, how often, if ever, they use certain products.
Encouraging consumers to use your products for multiple purposes is a smart marketing strategy.
Segmenting buyers by personal characteristics such as age, income, ethnicity and nationality, education, occupation, religion, social class, and family size is called demographic segmentationSegmenting buyers by personal characteristics such as their ages, incomes, ethnicity, and family sizes..
The video game market is very proud of the fact that along with Generation X and Generation Y, many older Americans still play video games.
Companies have to develop new products designed to appeal to Generations X and Y and also find new ways to reach them. Tweens might appear to be a very attractive market when you consider they will be buying products for years to come. Income is used as a segmentation variable because it indicates a groupa€™s buying power and may partially reflect their education levels, occupation, and social classes. In addition to segmenting by gender, market researchers might couple gender with marital status and other demographic characteristics. Family life cycleThe stages families go through over time and how it affects peoplea€™s buying behavior. Keep in mind that although you might be able to isolate a segment in the marketplace, including one based on family life cycle, you cana€™t make assumptions about what the people in it will want. As you can guess, even within various ethnic groups there are many differences in terms of the goods and services buyers choose.
You could go so far as to break down segments to the individual level, which is the goal behind one-to-one marketing. Type in your zip code, and you will see customer profilesThe description of a type of customer based on market segmentation criteria.
The tourism bureau for the state of Michigan was able to identify and target different customer profiles using PRIZM. Virgin Mobile is helping stores capitalize on proximity marketing by sending text messages to Virgin Mobile users when they opt to receive them.
Proximity marketingThe process of segmenting buyers geographically and targeting them within a few hundred feet of a business businesses using wireless technology.
To learn about how proximity marketing works at a real company, listen to Apurva Ghelani in this audio clip.
In addition to figuring out where to locate stores and advertise to customers in that area, geographic segmentation helps firms tailor their products.
If your offering fulfills the needs of a specific demographic group, then the demographic can be an important basis for identifying groups of consumers interested in your product. Psychographic segmentationSegmenting people by their activities, interests, opinion, attitudes, values, and lifestyles.
The segmenting techniques wea€™ve discussed so far in this section require gathering quantitative information and data.
Best Buy asked store employees to develop insight about local consumer groups in order to create special programs and processes for them. Intuit, the company that makes the tax software Quicken, has a a€?follow me homea€? program. Many of the same bases used to segment consumer markets are also used to segment B2B markets.
Researchers Matthew Harrison, Paul Hague, and Nick Hague have theorized that there are fewer behavioral and needs-based segments in B2B markets than in business-to-consumer (B2C) markets for two reasons: (1) business markets are made up of a few hundred customers whereas consumer markets can be made up of hundreds of thousands of customers, and (2) businesses arena€™t as fickle as consumers.
A price-focused segment is composed of small companies that have low profit margins and regard the good or service being sold as not being strategically important to their operations. A quality and brand-focused segment is composed of firms that want the best possible products and are prepared to pay for them.
A service-focused segment is composed of firms that demand high-quality products and have top-notch delivery and service requirements. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms. However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed.
Not everyone needs homeownersa€™ insurance, not everyone needs physical therapy services, and not every organization needs to purchase vertical lathes or CT scanners.
To do this you will need to divide or segment the people and organizations into different groups of potential buyers with similar characteristics.
Targeted marketing, or differentiated marketing, means that you may differentiate some aspect of marketing (offering, promotion, price) for different groups of customers selected. Ford pioneered the modern-day assembly line early in the twentieth century, which helped him cost-effectively pump out huge numbers of identical Model T automobiles. In fact, it can help you enlarge your customer base by giving you information with which to successfully adjust some component of your offeringa€”the offering itself, its price, the way you service and market it. Figuring out a€?whoa€™s whoa€? in terms of your customers involves some detective work, thougha€”often market research. Companies are now using the Internet to track peoplea€™s Web browsing patterns and segment them into target groups. Your own personal experience and talking to would-be buyers is an important part of the puzzle. The food-maker ConAgra launched the dinners in the late 1980s after its CEO, Charlie Harper, suffered a heart attack. Think about how much time and energy you spend when you switch your business from one firm to another, even when youa€™re buying something as simple as a haircut. Thata€™s why ita€™s so important to get to know, form close relationships, and focus selling efforts on current customers.John Birchall, a€?Value Trend Tests Brand Loyalty,a€? Financial Times, March 31, 2009, 12. Backroads looked at customersa€™ past purchases, the seasons in which they took their trips, the levels of activity associated with them, and whether or not the customers tended to vacation with children. When the homemaking maven Martha Stewart schedules a book signing, she tweets her followers, and voilA , many of them show up at the bookstore shea€™s appearing at to buy copies.
Hansen Cakes, a Beverly Hills (California) bakery, has about two thousand customers who visit its Facebook page.
Not all firms are equal in the minds of consumers, who will choose to do business with some companies rather than others. Gather all the information you can about your current customers, including their buying patterns, likes, and dislikes. Determine who your best customers are in terms of what they spend and will spend in the future (their customer lifetime value), and how easy or difficult they are to serve. Find ways and media in which to talk to customers about topics theya€™re interested in and enjoy. Mass marketing, or undifferentiated marketing, involves selling the same product to everyone.
Consequently, one obvious way to begin the segmentation process is to segment markets into these two types of groups.
Notice that the characteristics fall into one of four segmentation categories: behavioral, demographic, geographic, or psychographic. Harraha€™s, an entertainment and gaming company, gathers information about the people who gamble at its casinos. Avon Skin So Soft was originally a beauty product, but after Avon discovered that some people were using it as a mosquito repellant, the company began marketing it for that purpose. Demographics are commonly utilized to segment markets because demographic information is publicly available in databases around the world. The baby boomer generation is the second largest, and over the course of the last thirty years or so, has been a very attractive market for sellers.
Although ita€™s hard to be all things to all people, many companies try to broaden their customer bases by appealing to multiple generations so they dona€™t lose market share when demographics change. General Motors (GM) has sought to revamp the century-old company by hiring a new younger group of managersa€”managers who understand how Generation X and Y consumers are wired and what they want. People in these generations not only tend to ignore traditional advertising but also are downright annoyed by it. But would you change your mind if you knew that baby boomers account for 50 percent of all consumer spending in the United States?


Companies are aware that many consumers want to be in higher income groups and behave like they are already part of them.
For, example, did you know that more women in America than ever before (51 percent) now live without spouses?
High energy costs, the credit crunch, and concern for the environment are leading people to demand smaller houses. If youa€™ve visited a grocery store that caters to a different ethnic group than your own, you were probably surprised to see the types of products sold there.
Consequently, painting each group with a broad brush would leave you with an incomplete picture of your buyers. However, doing so would be dreadfully expensive, notes Juan Guillermo Tornoe, a marketing expert who specializes in Hispanic marketing issues. Before you open the store, you will probably want to do some research to determine which geographical areas have the best potential. Michigana€™s biggest travel segment are Chicagoans in certain zip codes consisting of upper-middle-class households with childrena€”or the a€?kids in cul-de-sacsa€? group, as Claritas puts it. Ghelani is a senior sales engineer for Air2Web, a company that helps businesses promote their brands and conduct transactions with people via their mobile phones. Chances are you wona€™t be able to find the same heavy winter coat you see at a Walmart in Montana at a Walmart in Florida because of the climate differences between the two places.
Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to career and family. Quantitative information can be improved with qualitative information you gather by talking to your customers and getting to know them.
Employees in one locale invited a group of retirees to their store to explain how to make the switch to digital television. Teams of engineers from Intuit visit peoplea€™s homes and spend a couple of hours watching consumers use Quicken. Unlike consumers, they arena€™t concerned about their social standing or influenced by their families and peers. The main types of buyer characteristics used to segment consumer markets are behavioral, demographic, geographic, and psychographic. You may also download a PDF copy of this book (19 MB) or just this chapter (1 MB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline). This process is called market segmentationThe process of breaking down all consumers into groups of potential buyers with similar characteristics. Sloan began to segment consumers in the automobile marketa€”to divide them up by the prices they wanted to pay and the different cars they wanted to buy. Even small businesses are able to do this cost-effectively because they dona€™t need their own software and programs. Go where you think would-be buyers goa€”restaurants, malls, gyms, subways, grocery stores, daycare centers, and officesa€”and ask questions to find out what they do during the day, what they talk about, what products or services do you see them using, and do they seem to be having an enjoyable experience when using those products or are they frustrated? If you arena€™t happy with your hair stylist and want to find a new hairdresser, you first have to talk to people with haircuts you like or read reviews of salons. This information will then be entered into a customer relationship management (CRM) system, and you might be e-mailed special deals based on the routes you tend to fly.
Finding ways to interact with customers that they enjoya€”whether ita€™s meeting or a€?tweetinga€? them, or putting on events and tradeshows they want to attenda€”is the key to forming relationships with them. During her downtime at the bakery, employee Suzi Finer posts a€?cakes updatesa€? and photos of the goodies shea€™s working on to the site. We would all be able to get exactly what we want from sellers, and our relationships with them would be collaborative, rather than adversarial.
Will you use higher customer satisfaction ratings, increased revenues earned per customer, number of products sold to customers, transaction costs, or another measure? When conducting business with them, include an a€?opt ina€? question that allows you to legally gather and use their phone numbers and e-mail addresses so you can remain in contact with them.
Identify and target customers that spend only small amounts with you but large amounts with your competitors. A firm will often use multiple segmentation basesCriteria used to classify and divide buyers into different groups., or criteria to classify buyers, to get a fuller picture of its customers and create real value for them. What about people with wide or narrow feet, or people with medical conditions, or certain hobbies? Benefits segmentationa€”segmenting buyers by the benefits they want from productsa€”is very common. High rollers, or people who spend a lot of money, are considered a€?VIPs.a€? VIPs get special treatment, including a personal a€?hosta€? who looks after their needs during their casino visits. Eventually, Avon created a separate product called Skin So Soft Bug Guard, which competes with repellents like Off!
Retro brandsOld brands or products companies a€?bring backa€? for a period of time.a€”old brands or products that companies a€?bring backa€? for a period of timea€”were aimed at baby boomers during the recent economic downturn. However, a recent survey found that the latest recession had forced teens to change their spending habits and college plans and that roughly half of older Generation Yers reported they had no savings.a€?Generation Y Lacking Savings,a€? Fort Worth Star-Telegram, September 13, 2009, 2D.
Several companies have introduced lower-cost brands targeting Generation Xers, who have less spending power than boomers.
Parents are now paying for their tweens to get facials, pedicures, and other pampering in numbers no one in years past could have imagined. Many of the companiesa€™ buyers were older Americans inclined to a€?buy American.a€? These people hadna€™t forgotten that Japan bombed Pearl Harbor during World War II and werena€™t about to buy Japanese vehicles, but younger Americans were. To market to Scion drivers, who are generally younger, Toyota created Scion Speak, a social networking site where they can communicate, socialize, and view cool new models of the car. The makers of upscale products such as Rolexes and Lamborghinis aim their products at high-income groups. Mercedes Benza€™s cheaper line of a€?Ca€? class vehicles is designed to appeal to these consumers. Consequently, the two groups are often, but not always, segmented and targeted differently. Can you think of any marketing opportunities this might present?Thomas Barry, Mary Gilly, and Lindley Doran, a€?Advertising to Women with Different Career Orientations,a€? Journal of Advertising Research 25 (Aprila€“May 1985): 26a€“35. For example, if you have no children, your demand for pediatric services (medical care for children) is likely to be slim to none, but if you have children, your demand might be very high because children frequently get sick. Ita€™s no secret that the United States is becominga€”and will continue to becomea€”more diverse. Many people of Asian descent are known to be early adapters of new technology and have above-average incomes. For example, although the common ancestral language among the Hispanic segment is Spanish, Hispanics trace their lineages to different countries. Moreover, both the Asian and Hispanic market segments include new immigrants, people who immigrated to the United States years ago, and native-born Americans. After all, are you really going to develop different products and different marketing campaigns and communications for each group? For instance, if your business is a high-end restaurant, should it be located near the local college or country club?
Table 5.4 "An Example of Geodemographic Segmentation for 76137 (Fort Worth, TX)" shows the profiles of buyers who can be found the zip code 76137a€”the a€?Brite Lites, Lia€™l Citya€? bunch, and a€?Home Sweet Homea€? set.
The bureau was also able to identify segments significantly different from the Chicago segment, including blue-collar adults in the Cleveland area who vacation without their children. Have you ever noticed that in rural towns, McDonalda€™s restaurants are hard to find, but Dairy Queens (DQ) are usually easy to locate?
For example, the group of potential consumers for cereal could be a€?almosta€? everyone although groups of people may have different needs with regard to their cereal. Psychographic information is frequently gathered via extensive surveys that ask people about their activities, interests, opinion, attitudes, values, and lifestyles. Because they have such abundant resources, they exhibit all three primary motivations in varying degrees. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. Their social lives reflect this focus and are structured around family, their place of worship, and work. As young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. They are conservative, conventional people with concrete beliefs based on traditional, established codes: family, religion, community, and the nation. Because they are motivated by achievement, Strivers are concerned about the opinions and approval of others. They express themselves and experience the world by working on ita€”building a house, raising children, fixing a car, or canning vegetablesa€”and have enough skill and energy to carry out their projects successfully. With few resources with which to cope, they often believe that the world is changing too quickly. Note that both VALS and PRIZM group buyers are based on their values and lifestyles, but PRIZM also overlays the information with geographic data. Instead, businesses are concerned solely with buying products that will ultimately increase their profits.
Now, however, firms are finding they can target their B2B customers more cost-effectively via e-mail campaigns, search-engine marketing, and a€?fan pagesa€? on social networking sites like Facebook. In terms of potential buyers, not all of them are a€?created equal.a€? Some customers are more equal than others, however. Mass marketingSelling the same product to all consumers., or undifferentiated marketing, came first.
Thata€™s when Harper realized there were people like him who wanted healthy convenience foods, so he began talking to them about what they wanted. Once you decide on a particular salon, you have to find it and explain to the new hairdresser how you want your hair cut and hope he or she gets it right. British Airways goes so far as to track the magazines its most elite fliers like to read so the publications are available to them on its planes. Along with information about the cakes, Finer extends special offers to customers and mixes in any gossip about Hollywood celebrities shea€™s spotted in the area. Best Buy got a lot of attention (not all of it good) when it was discovered they had categorized its buyers into a€?personas,a€? or types of buyers, and created customized sales approaches for each. Finding and attracting new customers is generally far more difficult than retaining onea€™s current customers, which is why organizations try to interact with and form relationships with their current customers. Companies are interested in frequent users because they want to reach other people like them. Similarly, Glad, the company that makes plastic wrap and bags, found out customers were using its Pressa€™n Seal wrap in ways the company could never have imagined. For example, kitchenware and home-furnishings company Williams-Sonoma opened the Elm Street chain, a less-pricey version of the Pottery Barn franchise. Online events such as the fashion shows broadcast over the Web are also getting the attention of younger consumers, as are text, e-mail, and Twitter messages they can sign up to receive so as to get coupons, cash, and free merchandise.
However, a growing number of firms today are aiming their products at lower-income consumers. You may be part of the target market not only for pediatric services but also for a host of other products, such as diapers, daycare, childrena€™s clothing, entertainment services, and educational products. Perhaps they do so because some studies show that the market segment with greatest financial potential is married couples without children.Brian J.
Nearly 70 percent of Hispanics in the United States trace their lineage to Mexico; others trace theirs to Central America, South America, and the Caribbean. If you sell ski equipment, you probably will want to locate your shop somewhere in the vicinity of a mountain range where there is skiing.
When the coupons are redeemed, the store can find out where its customers are locateda€”or not located. The organization then created significantly different marketing campaigns to appeal to each group.


Some consumers might be interested in the fiber, some consumers (especially children) may be interested in the prize that comes in the box, other consumers may be interested in the added vitamins, and still other consumers may be interested in the type of grains. One of the most well-known psychographic surveys is VALS (which originally stood for a€?Values, Attitudes, and Lifestylesa€?) and was developed by a company called SRI International in the late 1980s. They tend to be well educated and actively seek out information in the decision-making process. Achievers live conventional lives, are politically conservative, and respect authority and the status quo. They are comfortable with the familiar and are primarily concerned with safety and security.
As a result, you can gauge what the buying habits of people in certain zip codes are, which can be helpful if you are trying to figure out where to locate stores and retail outlets. Likewise, B2B sellers often divide their customers by geographic areas and tailor their products to them accordingly. Companies are also creating blogs with cutting-edge content about new products and business trends of interest to their customers. A number of people might be interested in your product idea if it satisfies a need, adds value, is priced right, or if they are aware when your product exists in the marketplace. Barringer and Duane Ireland, Entrepreneurship: Successfully Launching New Ventures, 3rd ed. He also advertised in every major newspaper and persuaded all kinds of publications to carry stories about the new, inexpensive cars.
Census Bureau, collect and report vast amounts of population information and economic data that can reveal changing consumption trends. You can locate potential customers by looking at blog sites and discussion forums on the Web. Two years after the Healthy Choice line was launched, it controlled 10 percent of the frozen-dinner market by concentrating on the health conscious segment.John Birchall, a€?Out to Launch in a Downturn,a€? Financial Times, June 4, 2009, 10. You also have to figure out what type of credit cards the new salon will accept and whether tips can be put on your credit card. After Hansen Cakes launched its Facebook page, the bakerya€™s sales shot up 15a€“20 percent. Not quite, but it does seem to be the direction the trend toward highly targeted marketing is leading. Think of it as being similar to the way in which your professor builds up information on a PowerPoint slide to the point at which you are able to understand the material being presented. Which benefit is most important to you when you buy a toothpaste: The toothpastea€™s price, ability to whiten your teeth, fight tooth decay, freshen your breath, or something else?
Marketing professionals believe they appealed to baby boomers because they reminded them of better timesa€”times when they didna€™t have to worry about being laid off, about losing their homes, or about their retirement funds and pensions drying up. The Starwood hotel chaina€™s W hotels, which feature contemporary designs and hip bars, are aimed at Generation Xers.Richard K.
The fastest-growing product in the financial services sector is prepaid debit cards, most of which are being bought and used by people who dona€™t have bank accounts. For example, because women make many of the purchases for their households, market researchers sometimes try to further divide them into subsegments.
A secondary segment of interested consumers might be grandparents who are likely to spend less on day-to-day childcare items but more on special-occasion gifts for children. Hill, Carey McDonald, and Muzzafer Uysal, a€?Resort Motivations for Different Family Life Cycle Stages,a€? Visions in Leisure and Business Number 8, no. Horton, the nationa€™s leading homebuilder, and other construction firms are now building smaller homes. However, this is prime turf for the a€?DQa€?a€” because it doesna€™t have to compete with bigger franchises like McDonalda€™s.
However, northern states are now seeing more of them as more people of Hispanic descent move northward.
Associating these specific needs with consumers in a particular demographic group could be difficult. Innovators are very active consumers, and their purchases reflect cultivated tastes for upscale, niche products and services. They are well informed about world and national events and are alert to opportunities to broaden their knowledge. They value consensus, predictability, and stability over risk, intimacy, and self-discovery. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities. They follow established routines, organized in large part around home, family, community, and social or religious organizations to which they belong.
They favor stylish products that emulate the purchases of people with greater material wealth.
They live within a traditional context of family, practical work, and physical recreation and have little interest in what lies outside that context. Because they must focus on meeting needs rather than fulfilling desires, Survivors do not show a strong primary motivation. For a fraction of the cost of attending a trade show to exhibit their products, B2B sellers are holding Webcasts and conducting online product demonstrations for potential customers.
Technology is also making it easier for even small companies and entrepreneurs to gather information about potential customers.
Forming close, personal relationships with customers and giving them exactly what they want is a process called one-to-one marketing. Some of the ways in which people use the product are pretty unusual, as evidenced by the following comment posted on the site: a€?I have a hedgehog who likes to run on his wheel a lot.
In addition to current statistics, the sites contain forecasts of demographic trends, such as whether some segments of the population are expected to grow or decline.
Miller and Kelli Washington, The 2009 Entertainment, Media & Advertising Market Research Handbook, 10th ed.
Eastman, a€?The Elderlya€™s Internet Usage: An Updated Look,a€? Journal of Consumer Marketing, 24, no. Firms are finding that this group is a large, untapped pool of customers who tend to be more brand loyal than most. In California, the health care provider Kaiser Permanente runs television ads letting members of this segment know that they can request Spanish-speaking physicians and that Spanish-speaking nurses, telephone operators, and translators are available at all of its clinics.Eric N.
Ethnic Segments and Their Spending" contains information about the number of people in these groups and their buying power. By contrast, a surfboard shop is likely to be located along the coast, but you probably would not find a snowboard shop on the beach. Marketing professionals want to know why consumers behave the way they do, what is of high priority to them, or how they rank the importance of specific buying criteria. Image is important to Innovators, not as evidence of status or power but as an expression of their taste, independence, and personality.
Thinkers have a moderate respect for the status quo institutions of authority and social decorum but are open to consider new ideas.
Experiencers are avid consumers and spend a comparatively high proportion of their income on fashion, entertainment, and socializing.
As consumers, Believers are predictable; they choose familiar products and established brands. Many see themselves as having a job rather than a career, and a lack of skills and focus often prevents them from moving ahead. If marketing professionals know what those benefits are, they can then tailor different toothpaste offerings to you (and other people like you).
After quite a while of cleaning a gross wheel every morning, I got the tip to use a€?Pressa€™n Seal wrapa€™ on his wheel, making clean up much easier!
If you are a car buff, you perhaps have noticed that the once-stodgy Cadillac now has a sportier look and stiffer suspension. Research has found that women who are solely homemakers tend to spend more money, perhaps because they have more time.
Think about brides (and want-to-be brides) and all the products targeted at them, including Web sites and television shows such as Say Yes to the Dress, My Fair Wedding, Platinum Weddings, and Bridezillas. Geocoding can help businesses see where prospective customers might be clustered and target them with various ad campaigns, including direct mail.
Innovators are among the established and emerging leaders in business and government, yet they continue to seek challenges. Although their incomes allow them many choices, Thinkers are conservative, practical consumers; they look for durability, functionality, and value in the products they buy.
Image is important to Achievers; they favor established, prestige products and services that demonstrate success to their peers.
Their purchases reflect the emphasis they place on looking good and having a€?coola€? stuff. Strivers are active consumers because shopping is both a social activity and an opportunity to demonstrate to peers their ability to buy. They are respectful of government authority and organized labor but resentful of government intrusion on individual rights. Customers that order many goods and services from a seller often receive special deals and are served by salespeople who call on them in person.
You need to get the biggest bang for your buck by focusing on those people you truly have a shot at selling to and tailoring your offering toward them. By contrast, targeted marketing is more like shooting a rifle; you take careful aim at one type of customer with your message. For example, Colgate 2-in-1 Toothpaste & Mouthwash, Whitening Icy Blast is aimed at people who want the benefits of both fresher breath and whiter teeth. Likewise, the Chrysler 300 looks more like a muscle car than the old Chrysler Fifth Avenue your great-grandpa might have driven.
Based on the targeted market, businesses can determine the location and type of stores where they want to sell their products. One of the most popular geocoding software programs is PRIZM NE, which is produced by a company called Claritas.
Have you ever gone to their homes and been shocked by their lifestyles and how vastly different they are from yours? Based on their responses to different questions, consumers were divided up into the following categories, each characterized by certain buying behaviors. They are unimpressed by material possessions other than those with a practical or functional purpose. By contrast, smaller customers are more likely to have to rely on a firma€™s Web site, customer service people, and salespeople who call on them by telephone.
With the increased use of social media, companies are able to get information on consumersa€™ search behavior. If you have a Web site, you can download an application onto your iPhone that will give you up-to-the-minute information and statistics on your sitea€™s visitors. Click on the following link to see a fun one created by Burger King to advertise its Tender Crisp Chicken.
PRIZM NE uses zip codes and demographic information to classify the American population into segments. Loyalty cards that consumers scan at many grocery and drug stores provide an incredible amount of information on consumersa€™ buying behavior.
The idea behind PRIZM is that a€?you are where you live.a€? Combining both demographic and geographic information is referred to as geodemographicsCombining both demographic and geographic information for marketing purposes. The idea is that housing areas in different zip codes typically attract certain types of buyers with certain income levels.



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