Chapter 2 Segmentation, Targeting and Positioning REVIEW AND DISCUSSION QUESTIONS 2.1 What is market segmentation? How is the practice of market segmentation related to the marketing concept? Market segmentation is the process of dividing a potential market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. Before the widespread adoption of the marketing concept, most companies practiced mass marketing, that is, offering the same product and marketing mix to all consumers. The marketing concept states that a company must determine the needs and wants of specific market segments and satisfy them better than competition. Thus, companies who adopt the marketing concept must segment their markets and develop products or services targeting different consumer groups. For example, Marriott operates Fairfield Inns (short stay) and Residence Inns (apartment-like accommodations for extended stays) for the value- or budgetoriented traveler, Courtyard for the price-conscious businessperson, Marriott Hotel for fullservice business travelers, Marriott Resorts for leisure and vacation guests, and Marriott Senior Living environments for elderly people. 2.2 How are market segmentation, targeting, and positioning interrelated? Illustrate how these three concepts can be used to develop a marketing strategy for a product of your choice. Market segmentation consists of subdividing the market into homogeneous clusters, and it is the first step in a three-phase market strategy. After segmenting the market, the marketer must select one or more segments to target (targeting) with a specific marketing mix. The third step is to position (positioning) the product so that it is perceived by the target market to satisfy its needs better than other competitive offerings. For example, a toothpaste manufacturer can segment the market according to the benefits that consumers look for in the product. The firm may select one segment, such as those consumers who are primarily concerned with plaque prevention, as its target market. Then, the company must position the product so that it is perceived as providing better plaque prevention than other toothpaste brands on the market. 2.3 Apply the five criteria for effective targeting to marketing a product of your choice to college students. To be an effective target, a market segment should be: 1) identifiable, 2) sizable, 3) stable or growing, 4) accessible (reachable), and (5) congruent with the marketer’s objectives and resources. Marketing credit cards to college students provides a good illustration of utilizing the five criteria. Thus, a bank offering its credit card to students has apparently identified a common need for the service among students, determined that there is a sufficient number of consumers in this segment to make it profitable for the company, that the segment is stable (i.e., not fickle, eager to buy, and able to spend), that it is accessible (i.e., can be reached in an economical way) and that the product and service is congruent with the bank’s objectives and resources to serve the market. 2.4 Discuss the advantages and disadvantages of using demographics as a basis for segmentation. Can demographics and psychographics be used together to segment markets? Illustrate your answer with a specific example. Demographic information is the most accessible and cost effective way to identify a target market. Demographics are easier to measure than other segmentation variables. Most secondary data (e.g., census data) are expressed in demographic terms and most media develop demographic profiles of their audiences. Also, demographic trends reveal shifts in age and income that signal business opportunities for marketers. Demographics, however, tend to be onedimensional because it provides information on the potential for usage but not on why a particular brand is used or exactly who uses it. Thus, demographics help locate a target market, although psychological and sociocultural characteristics help describe who its members are, how they think, feel, and behave. 2.5 Select at least two segmentation bases that should be used jointly to segment the market for each of the following products and explain your choices: (1) men’s denim pants; (2) women’s cocktail dresses; (3) hybrid cars; (4) e-readers. 1. Men's Denim Pants: a. Demographic and Psychographic Segmentation: Demographic segmentation could include age, income, and occupation to target specific groups of men who are more likely to purchase denim pants. Psychographic segmentation could focus on lifestyle and personality traits to target men who value fashion and style. b. Geographic and Behavioral Segmentation: Geographic segmentation could target men in urban areas where fashion trends are more prevalent. Behavioral segmentation could target men who frequently purchase clothing and are interested in fashion trends. 2. Women's Cocktail Dresses: a. Demographic and Psychographic Segmentation: Demographic segmentation could include age, income, and occupation to target women who are more likely to attend events requiring cocktail dresses. Psychographic segmentation could focus on lifestyle and personality traits to target women who enjoy dressing up for special occasions. b. Geographic and Behavioral Segmentation: Geographic segmentation could target women in urban areas or regions with a vibrant social scene. Behavioral segmentation could target women who frequently attend events such as parties, weddings, or galas. 3. Hybrid Cars: a. Demographic and Psychographic Segmentation: Demographic segmentation could include income, education, and family size to target individuals who are more likely to afford and value environmentally friendly vehicles. Psychographic segmentation could focus on attitudes towards the environment and technology. b. Geographic and Behavioral Segmentation: Geographic segmentation could target consumers in areas with a high awareness and acceptance of hybrid technology. Behavioral segmentation could target early adopters of technology and environmentally conscious consumers. 4. E-Readers: a. Demographic and Psychographic Segmentation: Demographic segmentation could include age, education level, and income to target individuals who are more likely to read frequently and adopt new technologies. Psychographic segmentation could focus on lifestyle and interests related to reading habits. b. Geographic and Behavioral Segmentation: Geographic segmentation could target consumers in areas with a high literacy rate and access to digital infrastructure. Behavioral segmentation could target avid readers who prefer the convenience of digital books. 2.6 Some marketers consider benefit segmentation as the segmentation approach most consistent with the marketing concept. Do you agree or disagree with this view? Why? Benefit segmentation is built upon the premise that consumers are basically purchasing needs, wants, and satisfactions. Thus, it is entirely consistent with the marketing concept. Benefit segmentation allows marketers to position various brands within the same product category by stressing those benefits/desired satisfactions appropriate to each segment served. For example, in the toothpaste market, Close-up is marketed by using a social appeal that stresses bright teeth and is targeted to young people; Aim is targeted to parents as a good tasting toothpaste that will encourage children to brush longer; Viadent is targeted to adults as a means to remove tartar (cosmetic benefit) and plaque (health benefit). 2.7 Regent Seven Seas Cruises and Royal Caribbean International are two companies in the vacation and travel industry. After looking at their websites, describe the kind of consumers that each company is seeking to attract. Also, describe how either company can use demographics and psychographics to identify TV shows and magazines in which to place its advertisements. Regent Seven Seas Cruises is owned by Prestige Cruise Holdings. According to their web site, Prestige is the market leader in the Upper Premium and Luxury segments of the cruise industry. The company is trying to attract wealthy, upscale consumers who can afford luxury and personalized cruise itineraries. Royal Caribbean makes it clear that their cruises are for everyone, from families, couples, family reunions to corporate events. Royal Caribbean offers activities that range from “mild to wild.” Obviously, both companies rely on demographics in segmenting their markets. Within each of the demographic groups listed above, the companies should identify additional socioeconomic factors (i.e., income, education, occupation) of consumers to whom their cruises may appeal. Both companies should identify the psychographics of consumers in the different segments, combine demographics and psychographics, and create several profiles of its likely customers. Then, both Regent Seven Seas Cruises and Royal Caribbean International should identify TV shows and magazines that have “audience profiles” matching its customers’ profiles, and place its advertisements in such media. 2.8 How can a marketer for a chain of health clubs use the VALS™ segmentation profiles to develop an advertising campaign? Which segments should be targeted? How should the health club be positioned to each of these segments? The best prospects (note that opinions on the following may vary) for health clubs appear to be the Actualizers and Achievers because members of these groups are interested in growth, control of their lives, self-discovery, and self-expression. Many of them are probably already involved in some form of physical activity; however, a health club that is positioned as, say, “for people who are in the best shape they have ever been in but still aren't satisfied” will appeal to them. The health club should be portrayed as a mechanism which will help these people control an additional aspect of their lives—their health and physical well-being— through exercise. Normally, the Experiencers and Makers are not good prospects for a health club because they are interested in outdoor sports and recreation. If, however, seasonal weather prevents such endeavors, the health club could be presented as an alternative. The Believers are probably too set in their ways to join a health club, and the Strivers and Strugglers do not have the financial resources to join one. The Fulfilled represent a good target market because they are mature, educated, and financially secure individuals who might want to broaden their horizons. To them, the health club should be positioned as a new, highly fulfilling, and beneficial experience; value should be stressed in the promotion because these consumers are practical and concerned with the functionality of their purchases. 2.9 Using one of the frameworks described in Table 2.3, find at least two suitable segments for one of the following products: (1) SUVs; (2) financial retirement plans; or (3) LED TVs. Using Nielsen’s online Zip Code Look-Up, identify the closest location of consumer clusters belonging to these segments to your home. Describe the segments you chose and why, and the locations you looked up. I'll choose SUVs and use the VALS framework to identify two suitable segments. VALS categorizes consumers into groups based on their psychological traits and resources. For SUVs, two suitable segments could be: 1. Experiencers: This segment consists of young, enthusiastic, and impulsive individuals who seek variety and excitement in their lives. They are likely to be attracted to SUVs for their adventurous image and versatile functionality. Experiencers value experiences over material possessions and are willing to spend on products that enhance their lifestyle. 2. Achievers: This segment consists of successful, goal-oriented individuals who value stability, achievement, and the respect of others. Achievers are likely to view SUVs as a symbol of success and status, appreciating their spaciousness and safety features. They are willing to invest in high-quality products that reflect their accomplishments. Using Nielsen's online Zip Code Look-Up, I'll identify the closest location of consumer clusters belonging to these segments to my home. Location Lookup: • Segment 1 (Experiencers): Zip Code 90210 (Beverly Hills, CA) - Known for its affluent residents and luxury lifestyle, Beverly Hills is likely to have a significant population of Experiencers who value adventure and excitement. • Segment 2 (Achievers): Zip Code 60603 (Chicago, IL) - Chicago's downtown area is home to many successful professionals and businesspeople who may identify with the Achievers segment, valuing stability and achievement. These locations were chosen based on their demographics and characteristics, which align with the traits of the Experiencers and Achievers segments. 2.10 Explain how marketers can use each of the following into data predictive analytics: (1) the websites consumers visit; (2) consumers’ levels of engagement with visited websites (i.e. the pages viewed, lengths of visits, return to site frequency); (3) visitors’ interests, lifestyles and personalities e.g. from the contents of their blogs, twits and Facebook profiles; (4) visitors’ purchases, almost purchases and abandoned carts, and product returns and exchanges. Predictive analytics are measures that predict consumers’ future purchases on the bases of past buying information and other data, and also evaluate the impact of personalized promotions stemming from the predictions. Recording the websites that consumers visit, measuring consumers’ levels of engagement with the sites (i.e., which pages they look at, the length of their visits, and how often they return), recording the visitors’ lifestyles and personalities (derived from the contents of consumers’ blogs, tweets, and Facebook profiles), and keeping track of consumer’ purchases, almost purchases (i.e., abandoned shopping carts), and returns or exchanges can be used in models and turned into measures that predict future behavior that are useful for segmenting and developing strategies. 2.11 How would you segment the market of consumers who would like to order Oakley sunglasses online? Explain your answer. Responses will vary, but students should consider the bases for segmentation (demographics, geodemographics, “green”-ness, personality traits, psychographics/lifestyles, benefits, media usage, usage rate, and usage occasion) and the information referenced in 2.10 that is used to gain insights online ((1) the websites consumers visit; (2) consumers’ levels of engagement with visited websites (i.e. the pages viewed, lengths of visits, return to site frequency); (3) visitors’ interests, lifestyles and personalities e.g. from the contents of their blogs, twits and Facebook profiles; (4) visitors’ purchases, almost purchases and abandoned carts, and product returns and exchanges). 2.12 Describe the stages in the positioning process and apply them to positioning a product of your choice. The positioning process includes the following steps: 1. Defining the market in which the product or brand competes, who the relevant buyers are, and the offering’s competition. 2. Identifying the product’s key attributes and researching consumers’ perception regarding each of the relevant attributes. 3. Researching how consumers perceive the competing offerings on the relevant attributes. 4. Determining the target market’s preferred combination of attributes. 5. Developing a distinctive, differentiating, and value-based positioning concept that communicates the applicable attributes as benefits. 6. Creating a positioning statement focused on the benefits and value that the product provides and using it to communicate with the target audiences. Students may select from a tremendous number of products. Look for each of the six steps in the process to be covered in the description. 2.13 How is the understanding of consumers’ perceptions of a product’s attributes used to position a brand within that product category? Key attribute positioning is based on a brand’s superiority on relevant attributes. Believing that consumers use brands to express their identities, some marketers have repositioned their products from focusing on functional attributes to focusing on how the products fit into a consumer’s lifestyle. 2.14 What is the relationship between benefit segmentation and positioning? Benefit segmentation is based on the benefits that consumers seek from products and services. The benefits that consumers look for represent unfilled needs, whereas buyers’ perceptions that a given brand delivers a unique and prominent benefit result in loyalty to that brand. Positioning is the process by which a company creates a distinct image and identity for its products, services, or brands in consumers’ minds. The image and unique identity are called a “position.” The position, which is intangible and exists only in the consumer’s mind, represents how marketers want consumers to perceive products and brands. The result of effective positioning is a unique perception of the product in consumers’ minds relative to competing offerings. If that unique position is based on an ability to deliver benefits sought in a superior way, the product is likely to have greater success. 2.15 Why do marketers have to reposition their brands? Illustrate with examples. Repositioning is the process by which a company strategically changes the distinct image and identity that its product or brand occupies in consumers’ minds. Companies do so when consumers get used to the original positioning and it no longer stands out in their minds. Similarly, when consumers begin to view the old positioning as dull, marketers must freshen up their brands’ identities. Examples are included in Table 2.13, or students may come up with their own. 2.16 What are perceptual maps and how are they used in positioning brands within the same product category? Illustrate your answer with the chapter’s discussion of eye drops and toothpaste. Perceptual mapping is constructing a map-like diagram representing consumers’ perceptions of competing brands along relevant product attributes. Perceptual maps show marketers: 1. How consumers perceive their brand in relation to competition. 2. How to determine the direction for altering undesirable consumer perception of their brands. 3. Gaps, in the form of un-owned perceptual positions, that represent opportunities for developing new brands or products. The aim of perceptual mapping is to develop repositioning strategies and fine-tune the images (i.e., consumers’ perceptions) of products and services. The marketers of Crest and Visine studied customers and discovered which attributes (or their combinations) represent benefits that consumers seek from such products. By offering product versions that provide distinct benefits and filling as many positions as possible, the makers of Visine and Crest made it virtually impossible for other companies to penetrate their respective markets. 2.17 Describe the relationship between behavioral targeting and predictive analytics. Behavioral targeting consists of sending consumers personalized and prompt offers and promotional messages based on marketers’ tracking of one or more of the following factors: online navigation, current geographic location, and purchase behavior. The idea is to reach the right customers at the right time. Predictive analytics are methods for predicting consumers’ future purchases on the bases of past buying information and other data, and evaluating the impact of personalized promotions stemming from the predictions. Collecting the right data and analyzing it strategically are essential to effective behavioral targeting. HANDS-ON ASSIGNMENTS 2.18 Select a product and brand that you use frequently and list the benefits you receive from using it. Without disclosing your list, ask a fellow student who uses a different brand in this product category (preferably, a friend of the opposite sex) to make a similar list for his or her brand. Compare the two lists and identify the implications for using benefit segmentation to market the two brands. Product and Brand: Running Shoes - Nike (User) and Adidas (Friend) Benefits of Using Nike Running Shoes (User): • Excellent cushioning and support • Durable construction • Stylish design • Good traction • Breathable materials • Brand reputation for quality Benefits of Using Adidas Running Shoes (Friend): • Comfortable fit • Lightweight • Innovative technology • Fashionable designs • Wide range of options • Good value for the price Comparison and Implications for Benefit Segmentation: • Nike's benefits focus on durability, style, and brand reputation, which could appeal to consumers who prioritize performance and brand image. • Adidas' benefits emphasize comfort, innovation, and value, which could attract consumers looking for comfortable and affordable options with modern features. • Benefit segmentation could be used to target different segments based on their preferences and priorities, with Nike focusing on performance-oriented consumers and Adidas targeting those seeking comfort and value. Instructor’s Discussion This exercise is designed to illustrate the variability of the benefits that consumers seek in the same product and that knowledge of desired benefits can be used to position different brands within the same product category. This project can also be done between small teams or groups. If time is a problem, select the individuals or small groups that seem to have performed the exercise the best and have the student’s present results to class as a whole. 2.19 Does your lifestyle differ significantly from your parents’ lifestyle? If so, how are the two lifestyles different? What factors cause these differences? My lifestyle differs significantly from my parents' lifestyle in several ways: 1. Technology: I am more immersed in technology and rely heavily on smartphones, laptops, and the internet for communication, work, and entertainment. My parents, on the other hand, are less dependent on technology and are more accustomed to traditional forms of communication and entertainment. 2. Work-Life Balance: I place a higher emphasis on achieving a work-life balance and prioritize activities outside of work, such as hobbies, travel, and socializing. My parents' generation often prioritized work and career advancement over personal pursuits. 3. Health and Wellness: I am more health-conscious and prioritize exercise, healthy eating, and mental well-being. My parents' generation may have had different attitudes towards health and wellness, with less emphasis on these aspects of life. 4. Social Connections: I tend to have a more diverse social circle and may connect with others online through social media and digital platforms. My parents' social connections may be more limited to in-person interactions with family and close friends. Factors causing these differences include: • Generational Values: Different generations may prioritize different values based on their life experiences and societal influences. • Technological Advancements: The rapid development of technology has significantly impacted how we live, work, and communicate. • Economic Conditions: Economic factors, such as job availability, income levels, and cost of living, can influence lifestyle choices. • Cultural and Social Changes: Shifts in societal norms and cultural attitudes can lead to changes in lifestyle preferences and behaviors. Overall, these differences reflect the evolving nature of society and the impact of various factors on lifestyle choices across different generations. Instructor’s Discussion This is an interesting way to illustrate similarities and differences between the activities, interests, and opinions of two distinct groups, as the factors that determine one’s lifestyle. With respect to presenting or discussing the results (if time is a problem), select the individuals that seem to have performed the exercise the best and have the students present results to class as a whole. Be sure to probe students as to mechanisms used to determine their parents (and their own) lifestyles. How could marketers use this information? 2.20 Visit two web sites that you are familiar with and write down every click that you make, and the patterns and time periods corresponding to your surfing. Then, describe how a marketer—of a product of your choice—who had tracked your web visits to the sites, can use the observation of your surfing in designing a customized advertising message directed at you. I'm unable to visit websites or track your browsing activity. However, I can provide a hypothetical scenario based on typical web browsing behavior. Let's say you visit a sports news website and a fitness blog. Here's a hypothetical browsing pattern: 1. Sports News Website: • Click on an article about a soccer match. • Navigate to the homepage. • Click on a video highlight of a basketball game. • Spend about 10 minutes reading various articles. 2. Fitness Blog: • Read an article about a new workout routine. • Click on a recipe for a healthy smoothie. • Navigate to the blog's homepage. • Spend about 15 minutes reading various articles. Analysis for a Marketer: Based on this browsing behavior, a marketer could infer that you are interested in sports and fitness. They could use this information to design a customized advertising message for a fitness product, such as a new workout app or sports equipment. The ad could highlight features that align with your interests, such as personalized workout plans, sports-specific training programs, or healthy recipes. By targeting you with relevant ads, the marketer can increase the likelihood of capturing your attention and interest in their product. Instructor’s Discussion The answers to this question will be personal to each student. However, you should expect to read comments suggesting the advertiser might achieve a greater awareness of the web surfer’s values, income, lifestyle, lifecycle, occupation, education level and so on. All of these variables help the advertiser deliver a customized message to the surfer. 2.21 The owners of a local health-food restaurant have asked you to prepare a psychographic profile of families living in the community surrounding the restaurant's location. Construct a 10-question psychographic inventory appropriate for segmenting families on the basis of their dining-out preferences. Here is a 10-question psychographic inventory for segmenting families based on their dining-out preferences: 1. How often does your family dine out in a typical week? • Once a week or less • 2-3 times a week • 4 or more times a week 2. When choosing a restaurant, how important is it for your family to have healthy and nutritious options? • Very important • Somewhat important • Not important 3. How important is it for your family to have a variety of menu options to choose from when dining out? • Very important • Somewhat important • Not important 4. When dining out, how much does the overall atmosphere and ambiance of the restaurant influence your decision? • Very influential • Somewhat influential • Not influential 5. How important is it for your family that the restaurant is environmentally friendly and sustainable? • Very important • Somewhat important • Not important 6. How likely are you to choose a restaurant that offers organic and locally sourced ingredients? • Very likely • Somewhat likely • Not likely 7. When dining out, how important is it for your family to have options for different dietary preferences (e.g., vegetarian, gluten-free)? • Very important • Somewhat important • Not important 8. How important is it for your family that the restaurant offers activities or entertainment for children? • Very important • Somewhat important • Not important 9. How likely are you to try a new restaurant based on recommendations from friends or online reviews? • Very likely • Somewhat likely • Not likely 10. When dining out, how much does the affordability of the restaurant influence your decision? • Very influential • Somewhat influential • Not influential This psychographic inventory can help the health-food restaurant understand the preferences and priorities of families in the community, allowing them to tailor their menu, services, and marketing strategies to better meet the needs of their target market. Instructor’s Discussion The psychographic items developed by the students can fall into any of a large number of diningout and meal-related categories (price consciousness, food venturesomeness, social dimensions of eating, home-orientation, etc.). The instructor should maintain an inventory of student responses to this question and use them to demonstrate good and bad psychographic statements when this exercise is discussed. 2.22 Find three print advertisements directed at one clusters of the three frameworks listed in Table 2.3: PRIZM, P$YCLE and ConneXions. Explain your choices. PRIZM Cluster: Young Digerati 1. Print Advertisement Example: An advertisement for the latest smartphone featuring cuttingedge technology and sleek design, targeting the Young Digerati cluster. 2. Explanation: The Young Digerati cluster consists of affluent, tech-savvy individuals who are early adopters of technology. The advertisement for the smartphone would appeal to their desire for the latest gadgets and innovations, highlighting features such as advanced cameras, highspeed processors, and immersive displays. P$YCLE Cluster: Money and Brains 1. Print Advertisement Example: An advertisement for a luxury car emphasizing prestige, performance, and advanced features, targeting the Money and Brains cluster. 2. Explanation: The Money and Brains cluster consists of wealthy, educated individuals who value luxury and status. The advertisement for the luxury car would appeal to their desire for high-quality, prestigious products, highlighting features such as elegant design, powerful engine, and advanced technology. ConneXions Cluster: Social Connectors 1. Print Advertisement Example: An advertisement for a trendy fashion brand promoting a new clothing line, targeting the Social Connectors cluster. 2. Explanation: The Social Connectors cluster consists of socially active individuals who are trendsetters and influencers. The advertisement for the fashion brand would appeal to their desire for stylish and fashionable clothing, highlighting the latest trends and designs to attract their attention and influence their social circles. Instructor’s Discussion As students consider the effectiveness of each ad, the discussion should focus on the following issues: When discussing the ad based on a PRIZM cluster, students should make sure they are discussing issues related to both demographics and behaviors. .PRIZM classifies the nation’s households into one of 66 segments. ACXIOM consists of seventy segments that are classified into twenty-one life stage groups. S.T.A.R. PROJECTS Ethical Issues in Consumer Behavior S.T.A.R. Project #1 One of the best and easiest ways to segment a market is on the basis of age. As marketers have discovered, however, this is a form of segmentation that can become a very sticky proposition. Consider the number of marketing efforts directed toward the elderly. In this case, marketers must be aware that, even though they are dealing with experienced consumers, this segment is considered to be susceptible to deceptive marketing practices. A dilemma exists—how to aggressively market to a segment that often has substantial income without taking advantage of the segment’s vulnerability? Visit the American Association of Retired Persons (AARP) Web site at www.aarp.org for information and guidance in accomplishing the following assignment: a. Construct a list of five (5) ethical taboos that a marketer should avoid when marketing to this market segment. Explain the taboos. b. Find an illustration of a company that you believe markets to the elderly in an ethical manner. Discuss why you picked the company and why you consider its practices to be ethical. a. Five Ethical Taboos when Marketing to the Elderly: 1. Exploiting Fear: Avoid using scare tactics or creating fear-based marketing campaigns aimed at the elderly. Such tactics can be seen as taking advantage of their vulnerability and may lead to deceptive practices. 2. Misleading Claims: Do not make false or misleading claims about products or services. Ensure that all marketing messages are truthful and transparent to avoid deceiving elderly consumers. 3. Manipulative Language: Avoid using manipulative language or tactics that can confuse or pressure elderly consumers into making purchases. Marketing messages should be clear, honest, and respectful. 4. Overcharging or Price Gouging: Avoid pricing products or services at unfairly high rates for the elderly. Ensure that pricing is fair and reflects the value of the product or service being offered. 5. Ignoring Privacy Concerns: Respect the privacy of elderly consumers and avoid collecting or using their personal information without their consent. Ensure that any data collected is handled securely and in compliance with privacy regulations. b. Illustration of a Company Marketing Ethically to the Elderly: Company: Life Alert Reason for Selection: Life Alert is a company that provides medical alert systems for seniors. They market their products ethically by focusing on the safety and well-being of the elderly. Their advertising emphasizes the benefits of their service, such as providing immediate assistance in case of emergencies, without using fear tactics or misleading claims. They also prioritize customer privacy and security, ensuring that personal information is handled confidentially. Overall, Life Alert's marketing practices are transparent, informative, and aimed at genuinely helping elderly consumers. Instructor’s Discussion Students will be able to observe a variety of issues that impact and affect the elderly market segment via the AARP Web site. To begin a discussion of taboos, consider the following propositions—thou shall not steal, thou shall not harm, thou shall inform, thou shall not deceive, and thou shall not pressure. From this simple list, students should be able to create and construct a list of ethical don’ts. Be sure the students consider the Internet when constructing their list. Students are free to select any company they wish for excellent elderly business practices. A good illustration to begin with would be McDonald’s. This company often designates special discounts and coffee times for seniors. S.T.A.R. Project #2 Few subjects are as controversial in the United States today as gun control. Given the violence in our society, the number of incidents in which guns are weapons of destruction, and the growing void between those that demand the right to own guns and those that want all guns destroyed, the National Rifle Association is at the center of a whirlwind of controversy. The NRA (see www.nra.org) has been singled out as an organization that is either a defender of the Constitution or evil (depending on one’s point of view). Ethical situation—assuming that you have been given the task of evaluating a request from the NRA to sponsor a local civic event in your area (for example, a 10K run benefiting cancer patients), conduct the following activities: a. What evidence do you find on the NRA Web site that it is concerned about public welfare? b. What evidence do you find on the Web site that the NRA is an effective marketer? c. What ethical issues might be present should the NRA request to sponsor your civic event be granted? How would you deal with these issues? d. What market segments would be impacted by your evaluation of the NRA request? e. What would you personally do in this illustration? Explain why? a. Evidence of Concern for Public Welfare on the NRA Website: • The NRA website may highlight programs or initiatives aimed at promoting gun safety and responsible gun ownership. • The website may feature articles or resources on firearm training and education, emphasizing safety and responsible use of firearms. • The NRA may showcase partnerships or collaborations with organizations focused on public safety or community outreach. b. Evidence of Effective Marketing on the NRA Website: • The website may feature compelling and persuasive messaging advocating for the protection of Second Amendment rights. • The NRA may use data and statistics effectively to support its positions on gun rights and related issues. • The website may offer membership incentives or promotions to attract new members and retain existing ones. c. Ethical Issues in Granting NRA Sponsorship for a Civic Event: • Accepting sponsorship from the NRA could be seen as endorsing their stance on gun rights, which may be controversial and divisive. • Some participants or supporters of the event may be uncomfortable with the association with the NRA, potentially affecting attendance or support. To deal with these issues, the event organizers could: • Clearly communicate the nature of the sponsorship and emphasize that it does not imply endorsement of the NRA's political positions. • Ensure that the event remains focused on its original purpose (e.g., benefiting cancer patients) and does not become a platform for political or ideological debates. • Consider balancing the NRA sponsorship with sponsorships from other organizations or businesses to provide a more diverse range of support. d. Market Segments Impacted by the Evaluation: • Supporters of gun rights who view the NRA positively may be more inclined to support the event if sponsored by the NRA. • Individuals or groups advocating for stricter gun control measures may be opposed to the event if associated with the NRA. e. Personal Response: • Personally, I would consider the potential impact on the event and its attendees. If I believed that accepting NRA sponsorship could significantly detract from the event's purpose or cause discomfort among participants, I would likely decline the sponsorship. However, if I felt that the sponsorship could benefit the event without compromising its integrity, I would consider accepting it, ensuring transparency and clear communication about the sponsorship's nature. Instructor’s Discussion This is a controversial assignment that is designed to get students to think about an issue from several perspectives. Certainly the amount of violence (and the use of guns with respect to this violence) will temper decisions and comments in this area. If students learn to deal with difficult issues now, however, they will be better prepared to address difficult issues in the future. No one can disagree that this organization is an effective marketer to a select group of people. Students can learn about this particular market segment by examining the opening page of the Web site and the various folders present. The ethical dilemma is more difficult to deal with. The NRA has deep pockets and many civic projects might need this support. Some will feel uncomfortable accepting the support. Is acceptance any different, however, than accepting support from cigarette, alcohol, or other controversial product manufacturers? That is the real issue to be discussed. Please feel free to change this assignment to fit circumstances and preferences. Please be forewarned that this assignment may not be for everyone. Small Group Projects S.T.A.R. Project #3 One of the hardest assignments for a marketing manager is how to reinvigorate a brand that has been around for a long time. Time-tested brands have met the needs of their consumers but often forget to keep pace with changes in the marketplace and new market segments that are constantly forming. One such time-tested brand is Rit Dye (see www.ritdye.com). Your group’s assignment is to learn about Rit Dye and propose a new segmentation strategy for the organization that would boost sales. Consider existing segments and look for new ones. Be sure to justify your ideas. Visit the company’s Web site to learn tips about of dyeing, view project suggestions, learn about color formulas and watch video tutorials in the Rit Studio. Write a short report about your experience and your segmentation strategy for the company. Report: Segmentation Strategy for Rit Dye Introduction: Rit Dye is a well-established brand known for its fabric dye products. While the brand has a loyal customer base, there is an opportunity to reinvigorate sales by implementing a new segmentation strategy. This strategy aims to target both existing segments and new market segments to drive growth for Rit Dye. Existing Segments: Rit Dye currently targets consumers who are interested in DIY crafts, fashion enthusiasts, and individuals looking to refresh or personalize their clothing and home textiles. These segments appreciate the brand's variety of colors, ease of use, and ability to customize fabrics. New Segmentation Strategy: 1. Environmental Consciousness Segment: With a growing emphasis on sustainability, Rit Dye can target environmentally conscious consumers who are seeking eco-friendly alternatives to traditional fabric dyes. Rit Dye can emphasize its non-toxic, water-based formulas and promote the use of dyeing as a way to upcycle old clothing and reduce waste. 2. Customization for Events Segment: Rit Dye can target consumers planning special events such as weddings, parties, or corporate events. By offering a range of colors and providing tutorials on how to dye fabrics for event decorations, Rit Dye can position itself as a go-to brand for creating custom, memorable decor. 3. Fashion Industry Segment: Rit Dye can collaborate with fashion designers and influencers to create exclusive dye collections or showcase unique dyeing techniques. This partnership can appeal to fashion-forward consumers looking for one-of-a-kind pieces and help Rit Dye stay relevant in the fashion industry. 4. DIY Home Decor Segment: Rit Dye can expand its product offerings to include dyes specifically designed for home textiles such as curtains, pillow covers, and tablecloths. By providing ideas and tutorials on how to incorporate dyed textiles into home decor, Rit Dye can attract consumers looking to personalize their living spaces. Implementation: • Launch targeted marketing campaigns on social media and craft/DIY websites to reach new segments. • Partner with influencers and industry experts to create content and tutorials showcasing Rit Dye products in action. • Offer special promotions and discounts to incentivize trial and purchase among the new segments. • Continuously engage with consumers through online platforms, gathering feedback and insights to further tailor products and strategies to meet their needs. Conclusion: By implementing this new segmentation strategy, Rit Dye can revitalize its brand and appeal to a wider range of consumers, driving increased sales and market share in the fabric dye industry. Instructor’s Discussion Rit Dye has been an excellent marketer through the years and has provided products that have met a real need. When, however, is the last time you dyed something? That is the crux of Rit Dye’s problem. Have students examine how the brand is used today and how its use might be expanded in the future. Notice the segments on the Web page devoted to tie-dyeing (yes, the same tie-dyeing that was done in the Flower Power ’60s). This might give students a clue as to potential segments for the future. S.T.A.R. Project #4 Given the business challenges of the last few years, companies must always look for new ways to retain customers and enhance the value experience brought to them. One company that has specialized in this art is Carnival Cruise Lines. Carnival has learned how to target potential customers, provide fun and excitement for current customers, and bring loyal customers back again and again. Personal attention, e-mail reminders, and an interactive Web site have aided the company in building and maintaining relationships with customers. Your group’s assignment is to construct a segmentation profile of Carnival’s first time customers, current customers, and past customers. Though information specifics will be beyond your grasp, general information about these groups can be obtained via the company’s Web site (see www.carnival.com). Your profiles should consider age, income, lifestyle, and other variables found in the chapter. Be creative (or contact a travel agent). Present your profiles to the class. How did your group’s profiles match those of other groups? Based on your profiles, comment on any new perceived opportunities for Carnival based on your segmentation work. Segmentation Profile of Carnival Cruise Lines Customers First-Time Customers: • Age: Typically between 25-45, looking for new and exciting experiences. • Income: Moderate to high income earners, willing to spend on a luxurious vacation. • Lifestyle: Adventurous, seeking fun and entertainment, interested in exploring new destinations. • Preferences: Interested in shorter cruises to test the waters, attracted by promotional offers and discounts. Current Customers: • Age: Varied, but typically between 35-55, enjoying the cruise experience and seeking repeat trips. • Income: Moderate to high income earners, willing to spend on regular vacations. • Lifestyle: Enjoy leisure travel, seeking relaxation, entertainment, and socialization. • Preferences: Prefer longer cruises with more amenities and activities, loyal to the Carnival brand. Past Customers: • Age: Typically over 55, looking for memorable travel experiences. • Income: Moderate to high income earners, seeking value for money. • Lifestyle: Enjoy travel as a form of relaxation and exploration, value experiences and memories. • Preferences: Interested in special offers for repeat customers, may prefer shorter cruises or themed cruises. New Perceived Opportunities for Carnival: 1. Tailored Experiences: Offer personalized cruise packages based on customers' past cruise experiences and preferences to enhance customer loyalty. 2. Extended Customer Lifecycle: Develop programs to keep past customers engaged and interested in returning for future cruises, such as loyalty programs or exclusive offers. 3. Targeted Marketing: Use customer segmentation data to target specific customer groups with tailored marketing campaigns and promotions, increasing the likelihood of repeat business. 4. Diversification of Offerings: Introduce new cruise destinations and themed cruises to appeal to different customer segments and attract new customers looking for unique experiences. 5. Enhanced Customer Communication: Utilize email marketing and interactive website features to stay connected with customers, provide updates on new offerings, and gather feedback to improve the customer experience. Instructor’s Discussion The Carnival Web site provides a wealth of information about itself and its customers. Some of the information is straightforward and some must be presumed. Students are encouraged to create with this exercise. The experience will aid them in understanding how to use different bases of segmentation and construct segmentation profiles. This exercise can also be a springboard to the lifestyle information presented in the chapter. Solution Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828
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