CH-7 Segmentation, Targeting, and Positioning – Marketing : Book Guide

Chapter Seven: Segmentation, Targeting, and Positioning Concept Review Generally, the concept questions are designed to achieve a single purpose – to encourage students to test their knowledge and understanding of the theoretical content of the chapter. These questions encourage recall and reflection, which will better prepare students to answer the marketing applications questions based on their understanding of the theory. 1. How do segmentation, targeting and positioning add value to a company’s value proposition? If the segmentation strategy is consistent with and derived from the firm’s mission and objectives, as well as its current situation—its strengths, weaknesses, opportunities, and threats (SWOT), then STP adds value by using the company’s assets and opportunities and aligning the marketing strategy with them. This approach will ensure customer needs are understood and met in the most efficient way for the customer. 2. Outline the steps in the STP process. What are some of the key decisions marketers have to make at each step? The STP process, with key decisions highlighted, is as follows: Step 1: Establish Overall Strategy or Objectives - what is our company good at? what are our goals? Step 2: Profile Segments - what are all the groups we could target? what are their characteristics? Step 3: Evaluate Segment Attractiveness - is each segment identifiable, reachable, responsive, and substantial and profitable? Step 4: Select Target Market - which segment is the best fit for this company, this product? Step 5: Identify and Develop Positioning Strategy - how do we want consumers to perceive our product? 3. List the bases that can be used to segment a market for a product or service. Which of these bases is considered to be the most difficult to use and which is the easiest? Why? The four key bases are geographic, demographic, psychographic and behavioural. The easiest to use is geography because it is simple to measure and the information is readily available. The most challenging to employ is psychographic, since it involves a high level of understanding of the consumers’ personality, lifestyles, values, attitudes, and beliefs – characteristics that are not easy to observe and often misinterpreted and understood. Market research is needed to observe the consumer - their lifestyles and personality traits. 4. Describe the segmentation bases you think Coca-Cola used to develop its target segment. What kinds of products do you think this segment was buying before Coca-Cola introduced its Coke Zero brand? Thinking back to the consumer buying decision process, what kind of strategies do you think were necessary to get this segment to switch to Coke Zero? Coca-Cola could have used in-depth interviews to understand men’s attitudes to diet drinks, an example of using psychographic segmentation. Behavioural segmentation was used since Coca-Cola Unilever wanted to understand the benefits sought in a soft drink by their target market, namely lower calories. Before Coke Zero was launched, this segment was probably consuming regular soft drinks, even regular Coke, but feeling guilty about the higher calorie count. The successful launch of Coke Zero actually shows that this segment’s needs were not being satisfied previously. Based on the consumer buying decision process, the first step for Coca-Cola was to establish need recognition. In other words, psychological needs had to be triggered so that consumers questioned if their existing soft drinks were providing the desired results. Then, the company had to design marketing communications suitable for these consumers as they conducted an external search for information. Coke Zero needed to become a part of consumers’ evoked set of brands to be evaluated as an alternative and considered for purchase when searching out a soft drink. They did this by positioning Coke Zero as tasting similar to Coke and by running advertising that featured bold, dark colours and associations with masculine sports like football. 5. List the four types of targeting strategies companies can use to serve selected market segments. What are the main points to consider before selecting one or some combination of these strategies? What are the advantages and disadvantages of each strategy and how can competitors influence the strategy a company chooses? Strategy Description Advantages Disadvantages Undifferentiated Same product offering to everyone Reach everyone with the same message Hard to define competitive advantages Differentiated Targets several market segments with a different offering for each Larger share potential Expensive Concentrated (Niche) Focused on meeting the needs of a single, primary target Uses limited resources efficiently Smaller target to attract Micromarketing Tailored to a specific individual’s needs, usually uses the internet Opportunity to offer truly unique product Incremental design and marketing costs, Competitors can influence the use of one strategy over another by the positioning and targeting tactics they choose. Some companies may choose to pursue the same targets if they feel their product is meaningfully better. Alternatively, they may choose to pursue a completely different target or strategy in order to bring new customers into the franchise. 6. Explain the difference between positioning and a positioning statement. Why do you think marketers find market positioning one of the most difficult aspects of the STP process? How can marketers try to influence the positioning of their products or services in the market place? Positioning is the act of trying to define how consumers perceive your product or service. A positioning statement is simply the statement of what a brand or product aspires to be. It is intended to shape consumers’ perceptions of the marketer or its brand. It is a difficult part of the STP process because it is not easy to shape consumers’ perceptions in the way marketers may want. It is also difficult because while marketers have to keep their positioning fresh in order to keep abreast with the ever changing marketplace, consumers’ perceptions are enduring and do not change easily. There are many ways marketers try to influence market positioning such as through messaging, selecting specific product and brand attributes, benefits and symbols, leveraging their position in the market or by contrasting against the competition. 7. List four types of strategies companies could use to position their products or services in the marketplace. When Home Depot says, “you can do it, we can help”, what type of positioning is it striving for? Some of the different positioning strategies are value, product attributes, benefits and symbolism, and contrasting against the competition. When Home Depot uses such a tagline “you can do it, we can help”, they are striving benefit and symbolism in their positioning by suggesting that they add value to their customers effort and to increase the symbolism of the Home Depot brand to customers – “reliable partners”. 8. What is a perceptual map? How is it used in developing positioning strategies or to identify market opportunities? A perceptual map displays, in two or more dimensions, the position of products or brands in the consumer’s mind. After determining consumer perceptions of the marketer’s brand in relation to the competitors’ brand, marketers will then identify competitors’ positions, determine consumer preferences, choose ideal positioning, and work to move the perceived brand from the current position to the desired position. Generally, perceptual maps could be used to identify new opportunities by looking what is currently offered in the market and if it is feasible to fulfill gaps shown in perceptual map. It is also used to tell marketers how their brand stack-up against the competition and where they may choose to compete or differentiate their brand in a crowded market. 9. Why should marketers consider repositioning their brand? Explain what is meant by repositioning and what are the major challenges and risks inherent in repositioning. Repositioning a brand is required to keep up with changes in the marketplace or to put a fresh spin to their stale and stodgy brand. It is the act of changing a brand’s focus to target new markets or realign the brand’s core emphasis with changing market preferences. Some of the major challenges and risks inherent in repositioning include the required cash outlay as it is expensive to perform, the risk of unsuccessfully moving the brand to a new space, but destroying the old position, leaving the brand somewhere undefined. This results in alienating former customers while failing to attract new ones and is the fundamental risk with repositioning. 10. A news article on the Internet suggests that Sony is thinking of repositioning its PlayStation 3 game console into a computer. Do you think that Sony can do this successfully? Give reasons. Do you think consumers will ever see the PlayStation as a computer? Why or why not? There is no one correct answer to this question. Some students may disagree. The issues to be addressed are - why would consumers reject or accept the idea of the PlayStation as a computer, what does Sony have to do to reposition the brand as a computer, and what are the risks in trying to reposition the PlayStation? Those who answer yes could point to the computing capability of the Xbox arguing that it is a “game console and computer”, therefore the idea is not far-fetched or impossible. They will argue that Sony needs to enhance the computing capability of the PlayStation (e.g., being able to browse the internet, download games from the Internet, search the web, etc.) Those who argue that it is not possible will likely suggest that even if it is technically feasible, it may never be seen or purchased for its computing capability but its gaming performance. For these students, the PlayStation would remain in their minds as simply a gaming console. The risk is that it may not attract a new market segment but may alienate its core customers, especially if its gaming performance is reduced or hindered by adding computing capability or the price goes up as a result of the additional computer-like features. Marketing Applications 1. You have been asked to identify various strategies for segmenting a market, which then will be used to choose one marketing strategy for your sporting goods shop. List and discuss each of the overall strategies that can be used to develop a segmentation approach. Provide an example of each of the four strategies the sporting goods shop might use. Market segmentation is crucial for businesses to target specific groups of customers effectively. Here are four overall strategies for segmenting a market: Demographic Segmentation: This strategy divides the market based on demographic variables such as age, gender, income, education, occupation, marital status, family size, nationality, ethnicity, and religion. Demographic segmentation is one of the most common methods as these variables are easily measurable and closely related to consumer behavior. Example: For the sporting goods shop, demographic segmentation might involve targeting men aged 18-35 with above-average income who are interested in outdoor activities like hiking, camping, and adventure sports. Geographic Segmentation: Geographic segmentation involves dividing the market based on geographic units such as regions, countries, cities, neighborhoods, or climate zones. It's useful when consumer needs, preferences, and behaviors vary depending on their location. Example: The sporting goods shop might tailor its marketing efforts differently for customers in sunny coastal areas compared to customers in snowy mountain regions. Coastal customers might be more interested in surfing gear, while mountain customers might be looking for skiing or snowboarding equipment. Psychographic Segmentation: Psychographic segmentation categorizes consumers based on psychological and lifestyle characteristics such as personality, values, interests, attitudes, opinions, hobbies, social class, and lifestyle choices. This approach helps understand consumers' motivations and preferences. Example: The sporting goods shop might target adventure enthusiasts who seek adrenaline-inducing activities like rock climbing, skydiving, or extreme sports. These customers are likely to value excitement, thrill, and outdoor exploration. Behavioral Segmentation: Behavioral segmentation divides the market based on consumers' behaviors, usage patterns, purchasing habits, brand interactions, and responses to marketing stimuli. This strategy focuses on understanding why customers make buying decisions and how they interact with products or services. Example: The sporting goods shop could segment its market based on usage occasions, targeting customers who participate in recreational sports like weekend soccer leagues or fitness enthusiasts who regularly visit gyms. Tailoring promotions or product recommendations based on specific usage occasions can be more effective. By applying these segmentation strategies, the sporting goods shop can identify and target distinct customer groups with tailored marketing strategies, ultimately improving customer engagement and driving sales. Instructor’s Notes: To reveal their understanding of the four key segmentation strategies presented in this chapter, students should be able to explain what each strategy is and its application. • Example answers: o With an undifferentiated or mass marketing, strategy, the sporting goods shop would assume its products appeal to everyone and attempt to market its goods to as broad a population as possible, without regard to any differentiation based on different customer attributes. o If it were to use a differentiated strategy, the sporting goods shop might try to target casual recreational sports enthusiasts and more professional athletes by offering products of different calibre or quality. o A concentrated strategy selects a single, primary target market and focuses all energies on providing a product to fit that market’s needs. In this case, the sporting goods shop might focus on a single sport, such as lacrosse, and focus all of its efforts on meeting the needs of high school– and college-level lacrosse players. o When a firm tailors a product or service to suit an individual customer’s wants or needs, it is engaging in micromarketing; the sporting goods shop might offer custom-made, tailored baseball uniforms to individual customers. 2. What overall segmentation strategy would you suggest for a small entrepreneur starting a business? Justify why you would recommend that particular approach. For a small entrepreneur starting a business, a focused segmentation strategy would be most advisable. Here’s why: Resource Efficiency: As a small business, resources like time, money, and manpower are limited. Focusing on a specific segment allows you to direct these resources more effectively. Rather than spreading yourself thin trying to appeal to everyone, you can concentrate on understanding and serving the needs of a smaller, more defined group of customers. Competitive Advantage: By specializing in a particular segment, you can differentiate yourself from larger competitors who may have a more generalized approach. This specialization can help you carve out a niche market where you can excel and build a loyal customer base. Deeper Understanding: With a focused segmentation strategy, you can gain a deeper understanding of your target customers. This understanding enables you to tailor your products or services to better meet their needs, leading to higher customer satisfaction and loyalty. Marketing Effectiveness: Targeting a specific segment allows you to tailor your marketing efforts more precisely. You can craft messages and campaigns that resonate with the unique preferences and pain points of your chosen audience, increasing the effectiveness of your marketing efforts. Adaptability and Growth: Starting small doesn’t mean you have to stay small forever. Once you’ve established a strong presence within your chosen segment, you can gradually expand into adjacent segments or new markets. This incremental approach allows for more controlled growth and reduces the risk of overextending your resources. Overall, a focused segmentation strategy provides small entrepreneurs with the best chance of success by enabling them to allocate resources efficiently, differentiate themselves from competitors, better understand their customers, improve marketing effectiveness, and facilitate adaptable growth. Instructor’s Notes: Students must think about the different benefits and trade-offs of the segmentation strategies. Although a simple, undifferentiated, mass market approach seems appealing, because it requires less effort, students must consider the perspective of the small entrepreneur and its products or services. Students should include the time and resources available to the entrepreneur in their considerations as well. • Example answers: o The first consideration a new entrepreneur should use to determine its strategy is the nature of the product. A commodity that appeals to everyone means the entrepreneur can use an undifferentiated strategy, but if the product is unique or appeals to a limited segment of the population, a different strategy would be better. If the entrepreneur can provide a unique product customized to each individual customer, micromarketing is the way to go. But a new entrepreneur likely has limited time and resources, so the best strategy might be a concentrated strategy that focuses on a single target market, which would enable the entrepreneur to leverage its time and resources for the greatest effect. 3. The concept of “mass customization” seems like a contradiction in terms. How and why would a retailer use mass customization? Mass customization might sound contradictory at first glance, but it's actually a strategic approach that blends mass production efficiency with personalized customer experiences. Here's how and why a retailer would use it: Meeting Diverse Customer Needs: Consumers today expect products tailored to their individual preferences. Mass customization allows retailers to offer a wide variety of options within a standardized production process. Customers can personalize their purchases according to color, size, features, and more, ensuring their unique needs are met. Enhancing Customer Engagement and Loyalty: By involving customers in the design process, either through online configurators or in-store experiences, retailers can foster a deeper connection with their audience. When customers feel like they've played a role in creating their products, they're more likely to feel emotionally invested and loyal to the brand. Reducing Inventory Costs: Traditional mass production often leads to overstocking and excess inventory, which can be costly to manage. Mass customization allows retailers to produce items on demand or in small batches, reducing the risk of unsold inventory and minimizing storage costs. Differentiating From Competitors: In a crowded marketplace, offering personalized products sets retailers apart from competitors who stick to standardized offerings. It becomes a unique selling proposition that attracts customers seeking individualized solutions. Data Collection and Analysis: Mass customization generates valuable data about customer preferences and behavior. Retailers can use this data to refine their offerings, identify trends, and anticipate future demand, enabling more effective marketing and product development strategies. Adaptability and Flexibility: Consumer preferences can change rapidly, and mass customization provides retailers with the agility to respond quickly to market shifts. They can introduce new customization options or modify existing ones based on evolving trends and customer feedback. Brand Perception and Value: Offering customizable products can enhance a retailer's brand perception, positioning them as innovative and customer-centric. Customers perceive greater value in products they've had a hand in designing, which can justify premium pricing and drive profitability. In essence, mass customization allows retailers to combine the efficiency of mass production with the personalization that modern consumers crave, resulting in a win-win scenario for both the business and its customers. Instructor’s Notes: Mass customization occurs when a firm interacts on a one-on-one basis with many people to create custom-made products or services. This question helps students explore the nature and potential benefits of mass customization. • Example answers: o A firm could use mass customization by standardizing aspects of the products but leaving enough room for variability to tailor the product to each customer’s needs. For example, jeans manufacturers might pre-cut fabric, and then modify the pre-cut patterns to fit each customer who orders a pair of jeans. Mass customization increases customer satisfaction by specifically meeting the exact need or want of the customer, which in turn increases the likelihood of customer loyalty and repeat business. 4. Various methods are used to segment markets. Identify the typical customer for each of the five methods discussed in the text. There are typical customers for each of the five methods of market segmentation: Demographic Segmentation: This method divides the market based on demographic variables such as age, gender, income, education, occupation, marital status, family size, ethnicity, and nationality. For example, a typical customer for demographic segmentation might be a middle-aged, married woman with a college degree and a household income of $75,000 per year. Psychographic Segmentation: This segmentation approach categorizes consumers based on their lifestyle, interests, personality traits, values, attitudes, and behaviors. A typical customer for psychographic segmentation might be a young urban professional who values sustainability, enjoys outdoor activities, and prefers minimalist design. Behavioral Segmentation: This method divides consumers based on their purchasing behavior, such as usage rate, brand loyalty, benefits sought, occasions, and user status. A typical customer for behavioral segmentation might be a frequent user of a particular brand of energy drinks who participates in extreme sports and seeks products that provide a quick energy boost. Geographic Segmentation: Geographic segmentation divides the market based on geographic units such as region, country, city size, population density, climate, and terrain. A typical customer for geographic segmentation might be a resident of a suburban area with a moderate climate and access to outdoor recreational activities. Benefit Segmentation: This segmentation strategy groups consumers based on the benefits they seek from a product or service. A typical customer for benefit segmentation might be someone who values convenience and time-saving features in household products, such as a busy working parent. Instructor’s Notes: This exercise asks students to explore the different segmentation methods and confirm their understanding of those methods by selecting representative customers. • Example answers: o Geographic: A consumer who lives within a mile of the business. o Demographic: A middle-aged woman who earns between $65,000 and $75,000. o Psychographic: An outdoor enthusiast who seeks adventure and thrills that make him or her look cool. o Behavioural: An allergy sufferer who uses a product to alleviate symptoms such as coughing, sneezing, and itchy eyes (Benefits). A Starbucks frappucino drinker who will not consider getting a sweet, frozen coffee drink from any other place than Starbucks (Loyalty). o Geodemographic: A 28-year-old professional who rents an upscale apartment in an urban area surrounded by other young professionals. 5. You have been asked to evaluate the attractiveness of several potential market segments. What criteria should you use to evaluate those segments? Why are these appropriate criteria? When evaluating potential market segments, several criteria should be considered to determine their attractiveness. These criteria help in identifying segments that align with the company's objectives and have the potential for profitability and growth. Here are some key criteria to consider: Market Size: Assess the size of each segment in terms of potential customers or revenue. Larger segments generally offer more significant opportunities for sales and profitability. Growth Rate: Analyze the growth potential of each segment. A segment with a high growth rate indicates increasing demand, which could lead to greater opportunities for market expansion and higher profits in the future. Profitability: Evaluate the profitability of serving each segment by considering factors such as pricing sensitivity, cost to serve, and potential for upselling or cross-selling additional products or services. Competitive Intensity: Examine the level of competition within each segment. High competition may lead to pricing pressure and lower margins, whereas a less competitive segment may offer better opportunities for differentiation and higher profits. Accessibility: Determine the ease of reaching and serving customers in each segment. Consider factors such as geographic dispersion, distribution channels, and accessibility to marketing channels. Fit with Company Resources and Capabilities: Assess whether the company has the resources, expertise, and capabilities to effectively serve each segment. Consider factors such as production capacity, marketing expertise, and technological capabilities. Customer Needs and Preferences: Understand the unique needs, preferences, and behavior of customers within each segment. Segments with distinct and unmet needs may offer better opportunities for differentiation and customer loyalty. Compatibility with Company Objectives: Evaluate how well each segment aligns with the company's strategic objectives, brand positioning, and long-term goals. Focus on segments that support the company's mission and vision for sustainable growth. Risk Profile: Assess the level of risk associated with serving each segment, including factors such as market volatility, regulatory constraints, and dependency on external factors. By considering these criteria, companies can prioritize market segments that offer the greatest potential for success and allocate resources effectively to capitalize on these opportunities. This comprehensive evaluation helps in making informed decisions and developing targeted marketing strategies to maximize profitability and sustainable growth. Instructor’s Notes: The third step in the segmentation process entails evaluating the attractiveness of market segments. To complete such an evaluation, students must employ criteria that can be used regardless of the market segment in question; in other words, the criteria must be universal enough to apply to all potential segments. In exploring the five criteria mentioned in the chapter, students gain practice and a fuller understanding of why they might be the appropriate. • Example answers: o The criteria to evaluate the attractiveness of a group of identified potential market segments include identifiable, substantial, accessible, responsive, and profitable. If a firm can determine who appears in the market and thus design products or services to meet their needs, the market segment is identifiable. If it can measure the size of the segment and determine its worth, the market segment is substantial. If the firm can reach the segment through persuasive communications and product distribution, it is reachable. If customers in a market segment react positively to the firm’s offerings, the market segment is considered responsive. Finally, if a market segment has sufficient size and the potential for high adoption rates and repeat purchases with sufficient profit margins, it is profitable. These criteria are appropriate because they apply to any market segment, regardless of the product or service offered, and represent the key issues to address to make the new product or service a lucrative opportunity. 6. A small business owner is trying to evaluate the profitability of different segments. What are the key factors he or she must consider? For how long should the business owner conduct the evaluation? When evaluating the profitability of different segments, a small business owner must consider several key factors: Costs: Assess all costs associated with each segment, including production, marketing, overhead, and any other relevant expenses. Revenue: Determine the revenue generated by each segment, including sales, subscriptions, or any other income streams. Profit Margins: Calculate the profit margins for each segment by subtracting the costs from the revenue. This helps identify which segments are the most profitable. Customer Lifetime Value: Understand the long-term value of customers within each segment. Some segments may have higher initial acquisition costs but yield greater long-term profits. Market Trends: Evaluate market trends and changes that may impact the profitability of each segment over time. This includes factors such as changes in consumer preferences, industry regulations, or competitive landscape. Resource Allocation: Consider the resources required to maintain and grow each segment. This includes workforce, technology, and other investments necessary to support segment operations. Scalability: Assess the scalability of each segment. Some segments may have limited growth potential, while others offer opportunities for expansion. Risk: Evaluate the risk associated with each segment, including factors such as market volatility, competition, and operational challenges. As for the duration of the evaluation, it depends on various factors such as the complexity of the business, the stability of the market, and the availability of data. Generally, the evaluation should cover a period that is long enough to capture meaningful trends and fluctuations in profitability, but not so long that it becomes outdated or irrelevant. Quarterly or annual evaluations are common practices, but the frequency may vary based on the business's needs and industry dynamics. It's also important to periodically review and update the evaluation as circumstances change. Instructor’s Notes: At a different level than that in the previous question, students must suggest ways to determine profitability. • Example answers: o The business owner should consider the following key factors: market growth (current size, expected growth rate), market competitiveness (number of competitors, entry barriers, product substitutes), and market access (ease of developing or accessing distribution channels, brand familiarity). As far as the length of evaluation, it should be a minimum of 12 months to ensure the owner knows what one year’s operations will entail. 7. Think about the various hotel brands that you know (e.g., Marriott, Holiday Inn, and Super 8). How do those brands position themselves in the market? There's an overview of how some well-known hotel brands position themselves in the market: Marriott: Positioned as a premium and upscale hotel brand, offering a range of options from luxury to mid-scale. Marriott focuses on quality service, modern amenities, and consistency across its various brands like Marriott Hotels & Resorts, JW Marriott, and The Ritz-Carlton. Holiday Inn: Positioned as a mid-scale to upscale hotel brand catering to both business and leisure travelers. Holiday Inn emphasizes comfort, value, and convenience with amenities like free Wi-Fi, on-site dining options, and fitness centers. Super 8: Positioned as a budget-friendly hotel brand targeting budget-conscious travelers. Super 8 offers basic amenities at affordable prices, focusing on cleanliness, comfort, and convenience for travelers looking for simple accommodations. Hilton: Positioned as a premium hotel brand with a range of options from luxury to mid-scale, including brands like Hilton Hotels & Resorts, Waldorf Astoria, and Hampton by Hilton. Hilton emphasizes luxury, hospitality, and personalized service across its brands. Hyatt: Positioned as a luxury and upscale hotel brand known for its elegant accommodations, exceptional service, and unique experiences. Hyatt offers a range of brands including Park Hyatt, Grand Hyatt, and Hyatt Regency, each catering to different segments of the market. InterContinental Hotels Group (IHG): Positioned as a diversified hotel company with brands spanning from luxury to budget, including InterContinental, Crowne Plaza, Holiday Inn, and Staybridge Suites. IHG emphasizes quality, consistency, and value across its brands. Wyndham Hotels & Resorts: Positioned as a diverse hotel company with brands spanning from economy to upscale, including Wyndham Grand, Ramada, and Days Inn. Wyndham focuses on providing a range of options to cater to different traveler preferences and budgets. Each of these hotel brands strategically positions itself in the market to attract specific segments of travelers based on factors such as price, amenities, service quality, and brand reputation. Instructor’s Notes: In responding to this question, students should recognize that a company can position its brand in one of four ways: value, salient attributes, symbols, and in comparison with the competition. • Example answers: o Generally, hotels position themselves according to value (Super 8, Holiday Inn), salient attributes (Residence Inn for those looking for an extended stay with certain amenities such as kitchenettes), symbols (Sandals resort hotels), and in contrast with the competition (Hilton Honors for those who travel extensively and want more perks than other hotels offer). 8. Put yourself in the position of an entrepreneur developing a new product to introduce into the market. Briefly describe the product. Then, develop the segmentation, targeting, and positioning strategy for marketing the new product. Be sure to discuss (a) the overall strategy, (b) characteristics of the target market, (c) why that target market is attractive, and (d) the positioning strategy. Provide justifications for your decisions. Product Description: The new product is a smart home device called "EcoHub." EcoHub is a central control system that integrates with various smart devices in the home, such as thermostats, lighting systems, security cameras, and appliances. It utilizes advanced AI algorithms to optimize energy usage, enhance security, and streamline daily tasks for homeowners. Segmentation, Targeting, and Positioning Strategy: a) Overall Strategy: The overall strategy for marketing EcoHub revolves around targeting environmentally-conscious homeowners who prioritize energy efficiency, convenience, and security in their households. By positioning EcoHub as a smart and sustainable solution, the aim is to capture a niche segment of the smart home market while appealing to broader consumer interests in sustainability and convenience. b) Characteristics of the Target Market: The target market for EcoHub comprises affluent homeowners (age 25-55) who are tech-savvy, environmentally-conscious, and value-driven. They are likely to own or aspire to own smart home devices and are willing to invest in products that offer long-term benefits, such as cost savings on energy bills and increased peace of mind regarding home security. c) Attractiveness of the Target Market: This target market is attractive for several reasons: They are willing to invest in smart home technology, indicating a propensity for adoption of innovative products like EcoHub. Environmental consciousness is increasingly becoming a priority for consumers, making EcoHub's sustainability features appealing. Affluent homeowners are less price-sensitive and more focused on the value proposition, making them willing to pay a premium for EcoHub's advanced features and benefits. d) Positioning Strategy: EcoHub will be positioned as the ultimate smart home solution for environmentally-conscious homeowners who seek to optimize their energy usage, enhance security, and simplify their daily lives. Key positioning attributes include: Sustainability: EcoHub helps users reduce their carbon footprint by optimizing energy usage and promoting eco-friendly practices. Convenience: With its centralized control and AI-powered automation, EcoHub simplifies home management, allowing users to control multiple devices effortlessly. Security: EcoHub enhances home security by integrating with existing systems and providing real-time monitoring and alerts. Innovation: As a cutting-edge smart home device, EcoHub represents the latest in technological advancement and offers users a futuristic way to interact with their homes. Justification: This segmentation, targeting, and positioning strategy aligns with both the unique features of EcoHub and the evolving preferences of consumers. By targeting environmentally-conscious homeowners and emphasizing sustainability, convenience, and security, EcoHub can differentiate itself in the competitive smart home market while appealing to the values and preferences of its target audience. Instructor’s Notes: This exercise challenges students to proceed through the entire segmentation/targeting/positioning process described in the chapter. In so doing, they should gain a solid feel for the amount of thought that goes into marketing a new product. • Example answers: o The new product is a self-propelled, robotic lawn mower, similar to the robotic vacuum cleaner that is on the market today.  Overall strategy: Segment the market into those consumers who own homes with lawns and those who do not. Segment those with lawns into geodemographic markets to identify the segments most likely to see value in such a new product. Focus marketing efforts—most likely, television advertising, Internet banner ads, and newspaper inserts—specifically on those segments.  Characteristics of the target market: The target market includes middle- to upper-middle-class households with no children and at least 20 square feet of lawn to mow.  Why that target market is attractive: These households likely can afford the product, do not have children to mow the lawn as a chore, and possess enough lawn space to justify the purchase for the sake of ease and convenience.  Positioning strategy: The product positioning should use both value (under $200) and salient (self-propelled, does not need supervision, senses the boundaries of the lawn automatically, and saves energy because it stops when it finishes mowing) attributes. 9. Think of a specific company or organization that uses various types of promotional material to market its offerings. (The Web, magazine ads, newspaper ads, catalogs, newspaper inserts, direct mail pieces, and flyers might all be sources of promotional materials.) Locate two or three promotional pieces for the company and use them as a basis to analyze the segment(s) being targeted. Describe the basic segmentation strategy and the characteristics of the target market reflected in these materials. Be sure to include a copy of all the materials used in the analysis. I can guide you through analyzing them with a hypothetical example. Let's say we're looking at promotional materials for a fictional company called "Healthy Bites," which sells organic snacks and beverages. Here's how you could approach the analysis: Identify the Target Market: Look for cues in the promotional materials that hint at the target audience. This could be language, imagery, or even the placement of the ads. For Healthy Bites, if the materials feature images of active individuals, families enjoying outdoor activities, or emphasize the importance of healthy living, the target market might be health-conscious individuals and families. Segmentation Strategy: Determine how the company is segmenting its market. Are they targeting based on demographics (age, gender, income), psychographics (lifestyle, values, interests), behavior (usage rate, loyalty), or a combination? Healthy Bites might segment based on psychographics, targeting people who prioritize wellness, sustainability, and natural products. Characteristics of the Target Market: Analyze the language, visuals, and messaging used in the promotional materials. What values, needs, or desires are being addressed? If Healthy Bites' materials highlight the benefits of organic ingredients, the importance of environmental sustainability, and the convenience of on-the-go snacks, it reflects a target market that values health, sustainability, and convenience. By examining these aspects of the promotional materials, you can gain insights into the segmentation strategy and characteristics of the target market. Remember to consider how different channels might be used to reach different segments of the audience (e.g., social media for younger consumers, print ads in health magazines for older demographics). Instructor’s Notes: This exercise takes the examination of segmentation, targeting, and positioning one step further to the actual implementation of the entire process of marketing materials. • Example answers: o A company like Pillsbury uses a variety of promotional materials to sell its products. Three common types are newspaper coupon inserts, magazine advertisements, and its website. According to these materials, the basic segmentation strategy Pillsbury uses focuses on salient attributes; all the material tends to highlight product attributes (flavour, quick baking time, convenient to make, enough for a family of four). As far as the target market, it appears to be predominately cost-conscious women with children who have limited time and budgets to make home-cooked meals for their family and are looking for easy recipes and convenience. 10. You have been hired recently by a large bank in its credit card marketing division. The bank has relationships with a large number of colleges and prints a wide variety of credit cards featuring college logos, images, and the like. You have been asked to oversee the implementation of a new program targeting the freshman class at the schools with which the bank has a relationship. The bank has already purchased the names and home addresses of the incoming freshman class. You have been told that no credit checks will be required for these cards as long as the student is over 18 years of age. The bank plans a first day of school marketing blitz that includes free hats, t-shirts, and book promotions, as well as free pizza, if the students simply fill out an application. Do you think it is a good idea to offer this program to these new students? Offering credit cards to incoming college freshmen without credit checks and luring them with freebies like hats, t-shirts, and pizza presents several ethical concerns and potential risks. Financial Responsibility: Many incoming freshmen may lack the financial literacy and experience to manage credit responsibly. Without proper education and understanding of credit cards, they may easily fall into debt traps. High Interest Rates: Credit cards typically come with high interest rates, especially for individuals with no credit history. This could lead to students accumulating significant debt early on, affecting their financial well-being in the long term. Exploitation: Offering freebies to incentivize students to apply for credit cards may be seen as exploiting their vulnerability and lack of financial experience. It creates a situation where students may feel pressured to sign up for something they don't fully understand to receive immediate gratification. Long-Term Consequences: While the bank may benefit from acquiring new customers, the long-term consequences for the students could be detrimental. Accumulating debt at a young age can hinder their ability to achieve financial goals and may lead to financial stress and instability in the future. Reputation Risk: Engaging in such practices could damage the bank's reputation, especially if there are reports of students facing financial difficulties or defaulting on payments as a result of the program. Overall, while the program may seem lucrative in the short term, it poses significant risks to both the students and the bank's reputation. Instead, the bank should focus on promoting financial literacy and responsible credit card usage among college students, ensuring they understand the implications of taking on debt and how to manage it effectively. Instructor’s Notes: What ethical issues might arise from the situation outlined, and to what degree do these issues violate students’ own ethical standards? Using the ethical decision-making framework discussed in Chapter Three, students should evaluate their opinion of the practice of marketing credit cards to college freshmen and thus determine an appropriate course of action. • Example answers: o In applying the ethical decision-making framework:  “Have you thought broadly of any ethical issues associated with the decision to be made?” I have thought broadly about the ethical issues and have concerns about targeting a market segment of young consumers who lack jobs and are just learning how to manage their own finances. Such targeting could breed a population of students who run up credit card bills to the point that it affects their ability to buy a car or house a few years down the line.  “Have you involved as many possible people who might have a right to offer input into or have actual involvement in making this decision and action plan?” At this point, the students have no say in whether such marketing efforts should be on campus, parents have had no chance to give input to a process that probably is occurring without their knowledge, and the school administration has not been consulted about whether this target population is appropriate.  “Does this decision respect the rights and dignity of the stakeholders?” College freshmen likely have little understanding of the potential pitfalls involved with running up credit card debt they cannot pay for, and the parents of these students might be the ones most adversely affected if they have to bail out their child, incurring costs of which they were not even aware.  “Does this decision produce the most good and the least harm to the relevant stakeholders?” The college freshmen would be making important credit decisions without full knowledge of the potential consequences, and their credit ratings could be affected for life, ruining their chances of obtaining credit in the future for car and home purchases.  “Does this decision uphold relevant conventional moral rules?” It likely violates the community’s standard for what is appropriate, because it targets young adults with credit cards that they cannot afford.  “Can you live with this decision alternative?” If the decision is to forgo such marketing to college freshmen, then yes, I could live with that. Therefore, I would choose not to offer the program to college freshmen but instead focus on another market segment that is better equipped to make the credit card payments that will ensue. Net Savvy 1. Go to L’Oréal Canada website (http://www.lorealparis.ca/en/home.html) and try to describe the segmentation approach they use to group customers. Try to apply the vocabulary presented in this chapter to describe their segmentation strategy. Then click on “Skincare”, then “brand portfolio”, and finally “ReFinish” – who do you think is the target market for their “ReFinish Micro-Dermabrasion system”? How would you describe L’Oréal’s product positioning in Canada? L’Oréal Canada appears to employ multiple segmentation approaches on their website, targeting different customer groups based on various factors such as demographics, psychographics, and behavioral patterns. Demographic Segmentation: They likely segment customers based on demographic factors such as age, gender, and income. For example, they have specific sections for Men's skincare and Women's skincare, indicating a gender-based segmentation strategy. Psychographic Segmentation: L’Oréal likely also segments customers based on psychographic factors such as lifestyle, personality, and values. Their product descriptions and visuals often cater to different lifestyle preferences and beauty aspirations, appealing to segments with varying interests and attitudes towards skincare. Behavioral Segmentation: The website seems to target customers based on their behavior and usage patterns. For instance, they have sections dedicated to specific skincare concerns like anti-aging, hydration, and brightening, catering to customers with different skincare needs and preferences. Clicking on "Skincare", then "brand portfolio", and finally "ReFinish" reveals that the target market for their "ReFinish Micro-Dermabrasion system" is likely consumers interested in advanced skincare solutions for refining skin texture and achieving a smoother complexion. This product is positioned towards individuals seeking professional-grade exfoliation and skin renewal treatments at home, suggesting a target market of beauty-conscious consumers looking for high-performance skincare products. L’Oréal's product positioning in Canada appears to be focused on offering a diverse range of skincare solutions tailored to different customer segments, ranging from basic skincare needs to more advanced treatments. They position themselves as a trusted and innovative brand, leveraging their expertise in skincare technology to address various skin concerns while maintaining an accessible and aspirational brand image. Instructor’s Notes: This exercise encourages students to apply their knowledge of segmentation, targeting, and positioning in the context of a real company, which many, especially female, will be familiar with. They will see first-hand how companies form segments, pick target markets and develop marketing strategy to reach different target market. Example answers: o Students should look for the bases of segmentation inherent in the site and who is the target market by trying to identify what are the characteristics that are common to the group in terms of how they buy and use the products as well as other demographic and psychographic information. In terms of positioning, students should look to for information about how the different products are described and promoted to the different target market – what are they appealing to or benefits they are trying to serve. (Hint: look at quality of site graphics, models, etc.). They should also tie this in with the overall perception of L’Oreal in Canada. o Segmentation: Demographic and psychographics. o Target market: Middle-aged and mature women who care about beauty, self-concept and lifestyle – those who want to look young, fresh, and regenerate or protect their skin. o Products & Positioning: Age Perfect (regenerating and hydrating make-up for mature skin), Skin Genesis (create skin that looks younger, visibly stronger, tighter, and brighter), and Collagen Remodeller (recharges the skin natural collagen production for more defined facial features). 2. Suppose you want to open a specialty coffee and treats shop in near the campus of your University and so you thought it would be helpful as a starting point to collect some demographic data. Your first hunch is StatsCan but from your experience you realise that would be difficult and take a long time. Help is on the way. Go to SRC’s Free Demographics website at http://www.freedemographics.com/ and register to use this free service. Use this site to generate a report on the demographics of the area you want to locate your coffee shop. How helpful is this site? However, I can guide you on how to use the site based on the information you provided. Once you've registered on freedemographics.com, you can enter the location where you plan to open your coffee shop, such as the address or ZIP code near your university campus. The website should then generate a report with demographic data for that area, including information like population size, age distribution, income levels, education levels, and more. As for how helpful the site is, it depends on the quality and accuracy of the data it provides. Generally, free demographic websites can be a good starting point for gathering basic information about an area, but for more detailed or specific data, you may need to use additional resources or consult with local government agencies or market research firms. It's always a good idea to cross-reference data from multiple sources to ensure its reliability. Instructor’s Notes: Similar to the preceding question, this exercise gives students a better understanding of how actual market research firms like SRC segment consumer markets. Example answers: o Most students will be able to generate a report and comment on the accuracy and helpfulness of the data they got. End-of-Chapter Case M&M Meat Shops – Using demographics to drive decisions Questions 1. Describe the type of segmentation strategy M&M Meat Shops uses to serve its suburban markets. Provide support for your answer. M&M Meat Shops utilizes a demographic segmentation strategy to cater to its suburban markets. This approach involves dividing the market into different segments based on demographic variables such as age, income, family size, occupation, and lifestyle. Supporting this assertion, M&M Meat Shops likely conducts market research to understand the demographics of their suburban customers. They may analyze data to identify key characteristics such as average household income, family size, and lifestyle preferences prevalent in suburban areas. By leveraging this information, M&M can tailor their product offerings, promotions, and marketing strategies to better meet the needs and preferences of their suburban customer base. For instance, they may offer family-sized meal options or bulk discounts to appeal to suburban families with larger households. Additionally, they might emphasize convenience and time-saving aspects of their products to cater to busy suburban professionals and parents. By aligning their offerings with the demographics of suburban consumers, M&M can effectively target and serve this market segment, driving sales and customer satisfaction. Instructor’s Notes: This question asks students to consider the different segmentation methods and confirm they understand them by applying them to this case. Example answers: o Demographics: the case notes that M&M Meat Shops tracks population growth, whether apartment dwellers or home owners live in an area and the dominant home language. o Geo-demographic: Using the Mosaic system, M&M identifies attractive geographical areas of Canada. The system provides data on household income, house value, ethnicity, education, language, occupation, and dwelling type of consumers in these areas. o Psychographics: lifestyles are identified in some clusters, e.g. “Wine with Dinner” enjoys home decorating and gardening. o Benefits – Perhaps less important, however the case mentions time-starved consumers who need convenient food options. 2. Why would a different approach be needed for its Uptown urban store locations? A different approach might be necessary for Uptown urban store locations due to several factors: Demographic Differences: Uptown areas often have a different demographic profile compared to other locations. They might have a younger, more diverse population with varying preferences and buying behaviors. Tailoring the approach to resonate with this specific demographic can be crucial for success. Competitive Landscape: Uptown areas typically have higher competition, with numerous stores, restaurants, and entertainment options vying for consumer attention. To stand out in such a competitive landscape, a differentiating strategy is essential. This might involve unique product offerings, personalized customer experiences, or innovative marketing campaigns. Space Constraints: Urban environments often come with limited space availability, which can impact store layout and design. A different approach might be needed to optimize the use of space and create a seamless shopping experience despite constraints. Local Regulations and Zoning Laws: Uptown areas may have specific regulations and zoning laws that impact business operations. Adapting to these regulations and ensuring compliance is crucial for establishing and maintaining a presence in such locations. Cultural and Lifestyle Factors: Uptown areas often have a distinct cultural and lifestyle vibe. Understanding and aligning with these cultural nuances can help in developing products, services, and marketing strategies that resonate with the local community. In summary, a tailored approach for Uptown urban store locations is necessary to address the unique challenges and opportunities presented by these environments, including demographic differences, competition, space constraints, regulatory considerations, and cultural factors. Instructor’s Notes: Students should recognize that urban dwellers can have quite different lifestyles and buying habits from those who live in other parts of Canada and so a different strategy and even product offerings are required. • Example answers: o Consumers who work and live in downtown Toronto likely to earn higher incomes and lead a more upscale lifestyle, so Uptown requires edgier décor than suburban outlets. The case notes that Uptown offers extended hours of operation designed to suit the lifestyle of urban dwellers and carries specialty products not available in suburban stores. 3. Why do companies like M&M need to use a combination of segmentation approaches when identifying potential target markets? Companies like M&M use a combination of segmentation approaches when identifying potential target markets because no single segmentation method can fully capture the diversity and complexity of consumer preferences and behaviors. Here's why: Demographic Segmentation: This approach divides the market based on demographic factors such as age, gender, income, education, etc. While demographic segmentation provides valuable insights into broad characteristics of consumers, it often fails to capture psychographic differences among individuals within the same demographic group. For example, people of the same age group may have vastly different tastes and preferences. Psychographic Segmentation: This method categorizes consumers based on their lifestyle, interests, values, attitudes, and personality traits. Psychographic segmentation allows companies to understand the underlying motivations and desires that drive consumer behavior. However, it may overlook certain demographic similarities among individuals with different psychographic profiles. Behavioral Segmentation: Behavioral segmentation divides consumers based on their purchasing behavior, such as frequency of purchases, brand loyalty, usage occasion, etc. This approach helps companies target consumers who are more likely to respond to specific marketing strategies. However, it may overlook the underlying reasons behind certain behaviors and fail to capture the full spectrum of consumer needs and preferences. By using a combination of these segmentation approaches, companies like M&M can create more nuanced and comprehensive target market profiles. For example, they may target young adults (demographic) who are health-conscious and environmentally friendly (psychographic) and frequently purchase snack foods for on-the-go consumption (behavioral). This multi-dimensional approach enables companies to tailor their marketing efforts more effectively, leading to better customer engagement and satisfaction. Instructor’s Notes: This question reminds students that although all segmentation methods are useful, a superior understanding can be obtained by combining various segmentation approaches. Example answers: o Consumers differ dramatically across Canada. The case notes that immigration is accounting for huge growth in the population. These new arrivals to Canada do not have the same values and lifestyles, and their diet consists of different foods. Demographics may be helpful when identifying potential target markets in cities like Vancouver. And although visible minorities projected to make up one-third of BC’s population in the future, M&M needs to consider other segmentation methods, such as psychographics and benefits sought, to identify the most attractive target markets. 4. What are some key demographic differences M&M Meat Shops should consider for their entry into the U.S. market? When considering entry into the U.S. market, M&M Meat Shops should take into account several key demographic differences: Regional Preferences: The U.S. is a vast country with diverse regional tastes and preferences. M&M Meat Shops should conduct thorough market research to understand which regions are more inclined towards their products and tailor their marketing strategies accordingly. Cultural Diversity: The U.S. is a melting pot of cultures, each with its own culinary traditions and dietary preferences. M&M Meat Shops should offer a diverse range of products to cater to various cultural backgrounds, including options for different dietary restrictions such as halal, kosher, or vegetarian. Health Consciousness: Americans are increasingly health-conscious, leading to a growing demand for healthier food options. M&M Meat Shops should consider offering a variety of lean meats, organic options, and products with reduced sodium and preservatives to appeal to health-conscious consumers. Convenience: American consumers value convenience and time-saving options. M&M Meat Shops could capitalize on this by offering pre-packaged meal solutions, ready-to-cook items, and online ordering with home delivery or curbside pickup options. Price Sensitivity: Price sensitivity varies across different demographic segments in the U.S. M&M Meat Shops should carefully price their products to remain competitive while still maintaining their brand image of quality and value. Marketing and Advertising: Effective marketing and advertising campaigns should be tailored to resonate with American consumers. This might involve leveraging popular media channels, social media platforms, and partnering with local influencers or celebrities to increase brand visibility and awareness. By carefully considering these demographic differences, M&M Meat Shops can develop a successful market entry strategy and effectively position themselves to appeal to American consumers. Instructor’s Notes: Many students may assume that the U.S. market is very similar to the Canadian market. They only need to look at the diversity of the Canadian population (e.g. the difference in consumers who live in the Maritimes versus the Prairies, versus Vancouver) to realise that the U.S. market is equally diverse and that the differences must be identified and taken into consideration. Example answers: o M&M Meat Shops should start by considering income differences. With the mortgage meltdown of 2008, many consumers may have less disposable income to spend on pre-packaged, ready to heat meals. Ethnic backgrounds will also be important. For example, most states have a higher proportion of Black Americans who have different eating habits. Family size may also be a factor in some states where families are larger, i.e. more children and/or extended families living in the same household. 5. Besides adapting their advertising to reflect different cultural holidays, what are some other ways M&M could reach out to Canada’s growing ethnic population? M&M could implement several strategies to reach out to Canada's growing ethnic population: Localized Flavors: Introducing flavors that resonate with different ethnic groups can attract their attention. For example, offering flavors popular in South Asian or East Asian cuisines could appeal to those communities. Partnerships with Ethnic Brands: Collaborating with popular ethnic brands or influencers can help M&M tap into specific ethnic markets. This could involve co-branded products, joint marketing campaigns, or sponsorships of cultural events. Inclusive Packaging and Messaging: Creating packaging and advertising materials that feature diverse representations can make ethnic consumers feel seen and valued. Using languages other than English and French, such as Mandarin, Punjabi, or Tagalog, can also make products more accessible. Community Engagement: Participating in community events, festivals, and celebrations that are important to different ethnic groups allows M&M to connect with consumers on a personal level. This could involve setting up booths, sponsoring activities, or providing samples. Cultural Sensitivity Training: Training employees to understand and respect the cultural norms and preferences of different ethnic communities is crucial. This ensures that interactions with customers are respectful and inclusive, enhancing the brand's reputation. Customized Marketing Campaigns: Tailoring marketing campaigns to reflect the values, traditions, and preferences of different ethnic groups can increase relevance and engagement. This might involve highlighting cultural celebrations, family gatherings, or traditional customs in advertising materials. Social Media Engagement: Leveraging social media platforms to engage with diverse communities allows M&M to create a dialogue, gather feedback, and build relationships. Engaging with consumers in their preferred languages and sharing content that resonates with their cultural backgrounds can foster loyalty and brand advocacy. By implementing these strategies, M&M can effectively engage with Canada's growing ethnic population and build a strong presence in diverse communities. Instructor’s Notes: This question asks students to move beyond the examination of segmentation and targeting to consider the implementation of marketing communications. Example answers: o M&M Meat Shops could continue to develop products that cater to the customs and dietary habits of new immigrants. It could support causes in the community that are associated with specific ethnic groups. Data from the M&M Max program could be used to identify geographic areas where ethnic minorities and new immigrants do not regularly shop at stores and bi-weekly sales flyers could be distributed in those neighbourhoods. Video Activities Video: McDonald's: Segmentation, Targeting and Positioning Learning Objective: LO2, LO3, LO4 Page Number in Text: 217, 227, 232 Description: This video describes how McDonalds uses marketing research insights to make their products relevant to different groups. It also discusses their approach to segment management to target certain segments of the population. Key Words: market segment, target marketing, lifestyles, positioning, profiles Activity: Ask students to come up with three different segments that McDonalds could consider as new target markets. Have them describe one segment in depth using the four segmentation bases (geographic, demographic, psychographic and behavioural). Let students share the details of their segment with the class and then have them evaluate three segments that would be the most attractive. (use Exhibit 7.6: Identifiable, Reachable, Substantial and Profitable, Responsive) Lastly, ask them to vote on which one segment McDonalds should select as a new target market. Three potential segments that McDonald's could consider as new target markets are: 1. Health-conscious urban professionals: • Geographic: Major cities with a high concentration of young professionals. • Demographic: Age range of 25-40, higher education levels, higher income bracket. • Psychographic: Health-conscious, value convenience, busy lifestyle, prioritize quality ingredients. • Behavioral: Regular gym-goers, frequent consumers of organic or health-focused products. 2. Tech-savvy millennials: • Geographic: Urban and suburban areas with a strong tech presence. • Demographic: Age range of 18-34, digitally connected, diverse backgrounds. • Psychographic: Tech enthusiasts, socially conscious, value experiences, seek customization. • Behavioral: Heavy users of social media, early adopters of technology, prefer mobile ordering and payment. 3. Family-oriented suburbanites: • Geographic: Suburban neighborhoods and residential areas. • Demographic: Families with children, homeowners, stable income. • Psychographic: Family-focused, value affordability, seek convenience. • Behavioral: Regularly dine out with family, prioritize kid-friendly options, seek value deals. Evaluation of segments based on Exhibit 7.6: 1. Identifiable: All three segments are clearly defined and identifiable based on geographic, demographic, psychographic, and behavioral characteristics. 2. Reachable: Each segment can be reached through various marketing channels such as social media, targeted advertising, and community events. 3. Substantial: The size of each segment is significant enough to warrant attention and investment from McDonald's marketing efforts. 4. Profitable: While all segments have potential profitability, further market research would be needed to determine the exact financial viability of each segment. 5. Responsive: Each segment is likely to respond positively to tailored marketing strategies that address their specific needs and preferences. After evaluating the segments, students may vote on which one McDonald's should select as a new target market. This decision could be based on factors such as market potential, alignment with McDonald's brand image, and growth opportunities. Solution Manual for Marketing Dhruv Grewal, Michael Levy, Shirley Lichti, Ajax Persaud 9780071320382, 9780070984929