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Create a 12- to 15-slide Microsoft® PowerPoint® presentation with speaker notes on trends in the consumer buying environment, and explain how these tie into the marketing segmentation by consumer groups.

Describe the consumer trends that influence purchasing patterns, and provide an overview of the different consumer groups (market segments).

Choose two of the companies from the list below:

Sports Spectrum Greeting Cards
Ty Beanie Babies
Sara Lee Desserts
Skeeter Boats
Gold Bond

Examine each company’s website to determine what segmentation strategy the firm uses.

Answer the following questions, and provide explanations for your responses:

Who is the intended target market for the website?
What communications objectives do you think the company is trying to accomplish?
What product-positioning strategy is being used?

Format your presentation consistent with APA guidelines.

MarketSegmentation and Buyer Behavior Presentation 2

>Grading Guide

MKT/544 Version 2

Market Segmentation and Buyer Behavior Presentation Grading Guide

MKT/544 Version 2

Integrated Marketing Communications

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Individual Assignment: Market Segmentation and Buyer Behavior Presentation

Purpose of Assignment

This assignment helps students understand buyer behavior and how it ties into market segments.

Grading Guide

Content		Met		Partially Met	Not Met	Comments:
The student describes the consumer trends that are influencing purchasing patterns
The student provides an overview of the different consumer groups (market segments).
The student chooses two companies from the provided list and examines each company’s website to determine what segmentation strategy the firm uses.
The student answers who the intended target market for the website is.
The student answers what communications objectives they think the company is trying to accomplish.
The student answers what product-positioning strategy is being used.
The presentation is 12 to 15 slides in length with speaker notes, and is appropriate for the audience.
The presentation includes relevant media and visual aids that are consistent with the content.
	Total Available		Total Earned
70	#/70

Met

Partially Met

Not Met

Comments:

Total Available

Total Earned

Presentation Guidelines
The presentation is laid out with effective use of headings, font styles, font sizes, and white space.
Intellectual property is recognized with in-text citations and a reference page.
The presentation includes an introduction and conclusion that preview and review major points..
Major points are stated clearly; are supported by specific details, examples, or analysis; and are organized logically..
Rules of grammar and usage are followed including spelling and punctuation.
	30	#/30

Assignment Total	#	100	#/100
Additional comments:

Chapter 4

The IMC Planning Process

CHAPTER OBJECTIVES

Students should be able to answer the following

questions:

4.1 What makes marketing research critical to the IMC planning process?
4.2 What categories are used to identify consumer target markets or market

segments?
4.3 What categories are used to identify business-to-business market segments?
4.4 How do the various approaches to positioning influence the IMC planning

process?
4.5 How do the marketing communications objectives interact with the other elements

of an IMC planning process?
4.6 How are communications budgets established?
4.7 What elements are considered in developing an IMC program?

OVERVIEW

This chapter describes the nature of the integrated marketing communications planning
process. An integrated marketing communications planning process requires careful
oversight by the company’s marketing personnel and any agencies the firm employs.

IMC Planning and McBreakfast

The vignette describes how the management and marketing team at McDonalds’ sought to
increase sales by serving breakfast all day. The huge rollout was countered by other chains
seeking to blunt the impact by engaging in similar tactics.

Questions for Students:

1. What consumer market segments does an all-day breakfast program serve?
2. Do you think the new tactic will keep working after the initial roll-out had success?

This chapter describes the nature of the IMC planning process (see Figure 4.1)

It begins with communications research that identifies potential target markets and
positioning strategies that match brand offer.

Next, communications objectives are specified.

Finally, a budget designed to achieve the communication objectives is matched with the IMC
components to be employed.

International considerations are taken into account.

Objective 4.1: What makes marketing research critical to the IMC planning

process?

Communications Research

Three primary research approaches include product-specific research, consumer-oriented
research, and target-market research.

Product-specific research involves identifying key product characteristics that become
selling points, such as phone apps for various consumers.

Product-specific research goes beyond understanding attributes or characteristics. It includes
an understanding of benefits that a product provides

Consumer-oriented research assists marketers in identifying the context of a product’s use.

• An anthropological approach involves direct observation of consumers using the
good or service.

• A sociological analysis examines social class issues, trends, and family life cycle
changes.

• The psychological approach looks at motives for product purchases, such as feeling
sexy, powerful, or intelligent.

Target-market research identifies who will be the recipient of the planned
communications campaign.

A focus group consists of consumers who are retained to talk about a particular topic,
product, or brand in front of a moderator or panel who tracks consumer comments and
ideas. The insights gained can become crucial elements in the IMC planning process.

Objective 4.2: What categories are used to identify consumer target markets or
market segments?

Market Segmentation by Consumer Groups

Target markets are often carefully specified as part of the market segmentation process,
which is discussed in detail later in this chapter.

A market segment is a set of businesses or group of individual consumers with distinct
characteristics. For a market segment to be considered a viable target, it should pass the
following tests:

• The individuals or businesses within the market segment should be similar in nature,
having the same needs, attitudes, interests, and opinions. This means persons or
businesses within the segment are homogenous.

• The market segment differs from the population as a whole. Segments are distinct

from other segments and the general population.

• The market segment must be large enough to be financially viable to target with a
separate marketing campaign.

• The market segment must be reachable through some type of media or marketing

communications method.

Market segmentation consists of identifying specific groups based on their needs, attitudes,
and interests.

Figure 4.2 displays the methods of segmenting the consumer market.

Segments Based on Demographics

Gender

Males and females purchase differing products, buy similar products with different features
(e.g., deodorants for women versus men), buy the same products for dissimilar reasons
(stereos, televisions), and buy the same products after being influenced by different kinds of
appeals through different media.

Figure 4.3 examines marketing to tweens.

Age

Another age-based demographic group, which appeals to many firms, is seniors, defined as
individuals over the age of 55.

Income

Spending is normally directed at three large categories of goods: necessities, sundries, and
luxuries. The amount of goods in each category a consumer will purchase is highly
dependent on their income.

Ethnicity

The three major ethnic groups in the United States are African Americans, Hispanics, and
Asian Americans.

Although different in many ways, there are several common threads among these ethnic
groups. They all tend to be more brand loyal than their white counterparts. They value
quality and are willing to pay a higher price for quality and brand identity. They value
relationships with companies and are loyal to the companies that make the effort to establish
a connection with them.

In recent years, the ways in which marketing professionals approach ethnic marketing have
changed. Rather than create separate campaigns for each ethnic group, agencies take a more
holistic approach and that incorporates insights into various ethnic groups to help create
stronger campaigns.

Psychographics

Psychographics emerge from patterns of responses, which reveal a person’s attitudes,
interests, and opinions (AIO).

These patterns can then be applied to other demographics, including gender, income, and
education.

Question for Students: Which demographics and psychographics match you?
Your parents?

Segments Based on Generations

Figure 4.4 identifies the characteristics of various generational segments.

The idea behind generational segments is that each generation goes through similar events
that create similar viewpoints and attitudes.

Figure 4.5 looks at the millennial generation.

Segmentation by Geographic Area

Marketing appeals made to people in a geographic area or region is geo-targeting.

This method is especially useful for retailers who want to limit marketing communication
programs to specific areas and for companies conducting direct mail campaigns in target
areas.

Geodemographic Segmentation

Geodemographics combines census data with psychographic information. An example
would be PRIZM (Potential Rating Index by Zip Marketing), which is a company that
specializes in geodemographics. PRIZM has identified 62 different market segments in the
United States.

Benefit Segmentation

Benefit segmentation focuses on the advantages consumers receive from a product rather
than the characteristics of consumers themselves. Demographics and psychographic
information can be combined with benefit information to better identify segments.

Usage Segmentation

The goal of usage segmentation is to seek to provide the highest level of service to a firm’s
low or casual, medium or heavy users.

Many companies are able to identify heavy users by utilizing their own databases, using bar-
code scanners, point-of-sale systems, and credit/debit transaction cards data.

Objective 4.3: What categories are used to identify business-to-business market

segments?

Business-to-Business Segmentation

Figure 4.6 lists the various forms of business-to-business segmentation.

Segmentation by Industry

Many firms use the NAICS (North America Industry Classification System) code. The
NAICS code is replacing the SIC (Standard Industrial Classification) coding system.

Firms can target specific industries such as construction (23) or wholesale trade (42). They
can also segment within a specific category.

Segmentation by Size

The rationale for this method is that large firms have different needs than smaller companies
and therefore should be contacted in a different manner.

Segmentation by Geographic Location

This approach is especially beneficial for businesses that have customers concentrated in
geographic pockets such as the Silicon Valley area of California.

Companies can also use geodemographics, combining geographic areas with demographic
and psychographic data.

Segmentation by Product Usage

Business markets can be segmented by how the good or service is used. Many services
(financial, transportation, shipping, etc.) have a variety of uses for distinct customers.

Segmentation by Customer Value

This method of segmentation is much easier for business-to-business firms to utilize than it
is for consumer businesses, due to the availability of in-depth data about each business
customer. A more precise value can be assigned to each individual business through sales
records and other sources of data and information.

Objective 4.4: How do the various approaches to positioning influence the IMC

planning process?

Product Positioning

Positioning is the perception created in the consumer’s mind regarding the nature of a
company and its products relative to the competition.

Positioning features variables such as the quality of products, the price, methods of
distribution, packaging, image, and other factors.

Two elements stand out: (1) how the product is perceived by customers and (2) the
product’s standing relative to the competition.

Approaches to Positioning

Various product positioning approaches are shown in Figure 4.7.

Product Attributes

Any product trait or characteristic that sets it apart from other products may be considered
an attribute.

Competitors

Using competitors to establish position can be accomplished by contrasting the company’s
product against others.

Use or Application

Positioning that involves creating a memorable set of uses for a product emphasizes the use
or application approach (Arm & Hammer as a deodorizer).

Price-Quality Relationship

Businesses that offer products at the extremes of the price range may position by price–
quality relationships.

Product User

This involves distinguishing a brand or product by clearly specifying who might use it.

Product Class

Position can be based on product class, such as an energy drink (Red Bull) versus soft drinks
(Coke, Pepsi).

Cultural Symbol

Positioning a product as a cultural symbol is not easy. When the position is successfully
achieved, the company holds a strong competitive advantage.

Question for Students: Are there any cultural symbols for your generation? What are
they?

Other Elements of Positioning

A brand’s position is never completely fixed. It can be changed.

Brand positioning applies to business-to-business marketing efforts.

International Positioning

In the international arena, effective positioning remains vitally important. Plans are made to
establish an effective position when a firm expands into new countries.

Effective positioning, by whatever method chosen, should increase sales and strengthen the
long-term position of an individual product and the total organization.

Objective 4.5: How do the various marketing communications objectives
interact with the other elements of an IMC planning process?

Marketing Communication Objectives

Marketing objectives tend to be general because they are for entire company. Some
examples of marketing objectives include the following:
• Sales volume
• Market share
• Profits
• Return on investment

In contrast, a communications plan may emphasize a specific communications objective.

Figure 4.8 lists some of the more common objectives present for profit-seeking
organizations.

• Develop brand awareness
• Increase product/service category demand
• Change customer beliefs or attitudes
• Enhance purchase actions
• Encourage repeat purchases
• Build customer traffic
• Enhance firm image
• Increase market share

• Increase sales
• Reinforce purchase decisions

Benchmark measures, which consider a starting point in relation to a degree of change
following a campaign, are useful to IMC programs.

Objective 4.6: How are communications budgets established?

Methods for determining marketing communications budgets appear in Figure 4.9.

Types of Budgets

Percentage of Sales

Budgets can be based on sales from the previous year or anticipated sales for the next year.

Meet-the-Competition

Meet the competition seeks to prevent loss of market share by raising or lowering
expenditures to match the competition.

Figure 4.10 displays ad spending and market share of top credit card companies.

“What We Can Afford”

This method sets the marketing budget after all of the company’s other budgets have been
determined. Money is allocated based on what company leaders feel they can spend.

Objective and Task

This method begins with a list of all communication objectives to pursue during the year and
then calculates the cost of accomplishing each objective.

Payout Planning

This occurs when management establishes a ration of advertising to sales or market share.
This method normally allocates greater amounts in early years to yield payouts in later years.

Quantitative Models

Quantitative models are simulations of relationships between advertising and sales or
profits. They may be difficult to create accurately.

Communications Schedule

A pulsating schedule involves continuous advertising and communications during the year
with bursts of higher intensity at specific times (more ads in more media).

Companies can also select a flighting schedule or approach, whereby communications are
presented only during peak times, and not at all during other times of the year.

Many marketing experts believe spending in level amounts keeps the brand name
repetitively in front of consumers, which is a continuous campaign schedule for items such
as durable goods.

Objective 4.7: What elements are considered in developing an IMC program?

IMC Components

Advertising expenditures may not make up the major portion of a marketing
communications budget.

In terms of dollars spent, media advertising normally accounts for about 41 percent of a
marketing communications budget. Trade promotions receive about 28 percent and
consumer promotions average about 28 percent of overall marketing expenditures (see
Figure 4.11). These percentages vary considerably from industry to industry

Budgets also vary by product type

Figure 4.12 shows ad spending as percent of sales for select industries.

Figure 4.13 indicates global ad spending by media.

International Implications

Figure 4.13 identifies some of the tactics used by successful globally integrated marketing
communications programs.

It is important to make sure the company’s products and marketing messages will be
understood in the region and, when needed, tailored to an individual area.

The goal is to create a borderless marketing plan that uses the same basic marketing
approach for all of a company’s markets.

This allows each subsidiary the freedom to determine how to implement that marketing
plan, in essence, to think globally but act locally.

Another key is developing local partnerships. Local partners can be marketing research
firms or advertising firms that are familiar with the local language and culture. These
partnerships sometimes are formed by hiring a cultural assimilator, who has an
understanding of the market and speaks both the language of the parent company and the
local region.

Communication segmentation means creating a communications package that effectively
reaches all possible target markets in another country.

A well-designed market communications analysis begins with the marketing team
identifying strengths and weaknesses of local competitors and places in which opportunities
exist.

Finally, solid communication objectives should be established.

INTEGRATED CAMPAIGNS IN ACTION: PROGRESSIVE BANK

Banks operate in a competitive market. Making one standout can be difficult, especially
through an advertising campaign. For a local bank, it becomes even more challenging.
French Creative advertising agency accepted this challenge with Progressive Bank.

The agency developed a unique campaign that not only highlighted some of the bank’s
strengths but also brought a human into the campaign to make the bank personal.

Important Note to Professors:

The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action
within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/.

Both methods contain actual print materials produced for the campaign. Broadcasts
material such as video ads, TV ads, and radio ads are embedded using YouTube and
Pearson servers.

These features bring to life the exciting process of building integrated advertising and
marketing campaigns. Most important, you will have access to insights and background
information from the agencies and the companies involved in how the campaigns were
created.

IMPLICATIONS FOR BRAND AND PROMOTION
MANAGERS

(Note to professors—these materials are not in the text. They provide a method for you
to summarize the chapter in a different way)

Recognize the connection between planning processes and evaluation processes. In other
words, planning should only begin after previous efforts have been reviewed and analyzed.
This would lead the account executive to ask the following questions about previous
marketing communications and campaigns.

• What was done right?
• What was done wrong?
• What are the company’s strengths and weaknesses?
• Did the last campaign (or previous promotional efforts) change this company’s

strengths and weaknesses?

When conducting IMC planning process, the account executive should be aware of the
following items:

• What the competition is doing (and plans to do, if that can be discovered)
• What opportunities are present in the environment
• How current company objectives can be integrated into the overall IMC

approach
• What kinds of promotional strategies are in place
• Alternative tactics that will help support the company’s strategies

As potential new market segments are being examined, consider the following criteria.
• Contribution to sales
• Contribution to profits, including how much should be spent in order to induce

sales and revenues from the segment
• Potential for growth of the segment
• Potential to build company and brand loyalty in the segment
• Potential for competition from other firms seeking to capture the same segment
• The ability to match the firm’s message to the particular attitudes and needs of

the segment
• The possibility of combining segments or designing similar appeals to segments.
• Other short- and long-term implications of designing promotional efforts toward

the segment

Appraise global markets using the same criteria as were used for local target markets.

REVIEW QUESTIONS

4-1. What three forms of market research are used to develop marketing
communications?

Three primary research approaches include product-specific research, consumer-
oriented research, and target-market research.

4-2. What functions are performed by focus groups?

A focus group consists of consumers who are retained to talk about a particular topic,
product, or brand in front of a moderator or panel who tracks consumer comments
and ideas.

4-3. Define market segment and market segmentation.

A market segment is a set of businesses or group of individual consumers with
distinct characteristics. Market segmentation consists of identifying specific groups
based on their needs, attitudes, and interests.

4-4. Define demographics. How are they used to segment consumer markets?

Demographics are population characteristics. Target markets can be identified by
gender, age, educational level, income, and ethnicity, as these are homogenous
groups.

4-5. How can firms take advantage of target markets by gender?

Segments for men and women can be combined with other demographics to create
target markets, for example, teenage females and senior men.

4-6. How do firms use age to identify market segments?

Children, young adults, middle-aged grown-ups, and senior citizens are all targeted
by different types of marketing campaigns. Often age-related factors are combined
with other demographics such as gender. Children have a major impact on the
purchasing decisions their parents make. Another age-based demographic group,
which appeals to many firms, is seniors, defined as individuals over the age of 55.

4-7. What role does ethnicity play in identifying market segments?

The three major ethnic groups in the United States are African Americans,

Hispanics, and Asian Americans. Several threads are common threads among these
ethnic groups. They all tend to be more brand loyal than their white counterparts,

value quality, and are willing to pay a higher price for quality and brand identity.
They value relationships with companies and are loyal to the companies that make
the effort to establish a connection with them.

In recent years, the ways in which marketing professionals approach ethnic
marketing have changed. Rather than create separate campaigns for each ethnic
group, agencies take a more holistic approach and that incorporates insights into
various ethnic groups to help create stronger campaigns.

4-8. What problems are associated with markets segmented according to geographic
areas?

The main problems associated with segmenting the market geographically are that
everyone in the geographic area is targeted, with no focus on personal preferences or
individual differences.

4-9. What are geodemographics? How can they be successfully used to define
market segments?

Geodemographics is a combination of using census data with psychographic
information. This approach can be successful because marketers can conclude that
people in certain areas tend to have the same basic needs. Geodemographics
segmentation goes a step further by suggesting common personal preferences in
individual geographic areas.

4-10. Describe usage segmentation and benefit segmentation.

Usage segmentation is defining the market by usage or purchases. It is designed to
maximize sales to all user groups. Companies then gather information from their
most frequent customers and form their own database of customers describing their
wants and needs.

Benefit segmentation is focusing on the advantages consumers receive from a good
or service rather than the characteristics of consumers themselves. Companies use
this technique to understand the preferences of different groups of consumers.

4-11. What are the common business-to-business market segments?

The common business-to-business market segmentation concepts are by industry,
business, and size. Segmentation by industry is utilizing the NAICS codes to identify
a company’s potential of being a quality customer.

4-12. Describe the NAICS approach to business market segmentation.

The NAICS approach to segmentation is using the company’s business code to
decipher what products the firm will need or purchase. It is better than the old SIC
code because it broadens the product categories from 10 to 20. This allows for a
more precise classification of

businesses.

4-13. Describe a usage segmentation approach in a business-to-business setting.

An example of a usage segmentation approach in a business-to-business setting
would be that although Xerox markets to most businesses, the company pays extra
attention to schools because these organizations utilize so many copiers, allowing for
both sales and service contracts. (Student answers will vary.)

4-14. Describe a segmentation approach based on company size.

A segmentation approach based on company size would target companies within a
certain range. For instance, an advertising agency may target firms that have sales
from $3 million to $20 million. Another agency may target the small firms, with
incomes less than $3 million. Another agency may go after extremely large
international firms, with sales over $1 billion.

4-15. Define product positioning and identify the types of positioning approaches that
can be used in the IMC planning process.

Positioning is the perception created in the consumer’s mind regarding the nature of
a company and its products relative to the competition. It includes the following:

• Product Attributes
• Competitors
• Use or Application
• Price-Quality Relationship
• Product User
• Product Class
• Cultural Symbol

4-16. What is a benchmark measure?

A benchmark measure represents the starting point that has been established in
relation to the degree of change following a promotional campaign. In other words,
the benchmark is the baseline from which future outcomes can be assessed.

14-7. What common marketing communications objectives do firms establish?

The most common marketing communications objectives that firms establish are the
following:

• Reinforce purchase decisions

4-18. Describe the methods that can be used to establish a communications budget.

The types of communications budgets are the following:

• Percentage of sales method, which uses a percentage of the previous year’s sales

and a projection of the coming year’s sales
• Meet the competition, which is designed to prevent a loss of market share
• What we can afford, which establishes the marketing budget after all other

budgets have been set
• Objective and task method, which allows management to set goals and ways to

achieve those goals through marketing dollars
• Payout planning, which establishes a ratio of advertising to sales or market share

based on Nielsen ratings
• Quantitative models use computer simulations to locate relationships between

advertising and promotional expenditures

4-19. Describe the three types of advertising schedules that may be used during the

course of a year.

A pulsating schedule involves continuous advertising and communications during
the year with bursts of higher intensity at specific times (more ads in more media).
Companies can also select a flighting schedule or approach, whereby
communications are presented only during peak times, and not at all during other
times of the year. Level amounts of spending keeps the brand name repetitively in
front of consumers, which is a continuous campaign schedule.

4-20. Which IMC components are more likely to be used in business-to-business
marketing communications programs, as compared to consumer markets?

Figure 4.14 indicates how business-to-business marketing monies are allocated.

Although telemarketing may be detested by consumers, it remains an important
component of business-to-business marketing. Direct mail is used extensively along
with noncatalog direct mail. Television advertising is a much smaller amount than for
consumer products while internet marketing expenditures are much larger, used even
more than television.

CRITICAL THINKING EXERCISES

Discussion Questions

4-21. Assume you are a marketing intern for Lululemon and have been asked to

conduct some communications research around the brand’s leggings. Identify
the three types of communication research and describe how you could use each
to gather information that can be used in marketing Lululemon’s leggings.

The students should note product characteristics and what needs they serve (product

research), the types of customers who would be interested in the items and why
(consumer research) based on sociological or psychological needs, and then state a
target market based on demographics, age, usage, or some other (less likely) market
segmentation approach.

4-22. Daniel Taylor Clothier has noticed a decline in the sales of men’s ties. Company

marketers believe they should focus advertising effort on the market segment
most likely to purchase ties. Examine the segmentation variables identified in
Figure 4.2. If you were responsible for the segmentation strategy for Daniel
Taylor Clothier’s, which segmentation variables would you use? Justify your
answer.

Age, gender, income, and psychographics are all possibilities. Student answers will

vary based on their personal response. Refer to the MyLab for an opportunity to
assign this question, and all starred MyLab questions, to a student discussion board.

4-23. Make a list of five consumer goods or services segmented on the basis of gender
but sold to both genders. Are there any differences in the product or service
attributes? Are there differences in how they are marketed? What are those
differences? Do you think using a different marketing approach has worked?

Student responses will vary. They should note how each gender uses the product and

how companies advertise and promote the products. Refer to the MyLab for an

opportunity to assign this question, and all starred MyLab questions, to a student
discussion board.

4-24. Make a list of five consumer goods or services that are segmented on the basis of

age. Are there actual differences in the product or service attributes? Are there
differences in how they are marketed? What are those differences? Do you
think using a different marketing approach has worked?

Student answers will vary based on their personal response. Refer to the MyLab for

an opportunity to assign this question, and all starred MyLab questions, to a student
discussion board.

4-25. Examine the list of demographic segmentation variables. For each
demographic variable listed in the text, identify two products that are
marketed to a specific demographic segment. Identify the specific demographic
segment and explain why the product is aimed at that particular market
segment. Identify one brand that has been especially successful at reaching a
specific demographic segment.

Student answers will depend on products chosen.

4-26. Examine the VALS psychographic groups presented in the chapter. For each of

the following goods or services, identify the VALS segment that would be the
best to target. Justify your choice. Describe an advertisement or marketing
communication that could be use for the VALS segment you identified for each
product.

a. Seafood restaurant
b. Home accounting software
c. Optometrist or eye-care clinic
d. Florida resort
e. Home furniture

Student answers will vary based on their personal response. Refer to the MyLab for
an opportunity to assign this question, and all starred MyLab questions, to a student
discussion board.

Student answers will vary, but some suggested answers follow.

a. A seafood restaurant is satisfying hunger needs, entertainment needs, and can be

marketed to be exotic, showing sea shores and people enjoying themselves at the
beach. (Red Lobster)

b. Home accounting software saves time and gives the person a sense of control.

c. An optometrist or eye-care clinic sells the benefit that the consumer will see
more clearly. Safety is also an issue, as well as a customer service. (Pearle)
America’s Contacts and Eyeglasses markets to lower-income people through
price.

d. A Florida resort offers relaxation and luxury (benefit) and may appeal to certain

age groups and income levels.

e. Home furniture depends on the price and quality levels involved.

4-27. Millennials are an attractive generation for marketers. Examine the millennial
segments described in the chapter. Which segment do you belog to? Why?
Identify a friend or relative that would fit into each of the other millennial
segments. Explain why you would put them into that particular millennial
segment.

Student answers will depend on the friend or relative chosen and that person’s
characteristics.

4-28. Usage segmentation targets heavy users, average users, light users or nonusers.

Describe campaigns for each of the usage segments for a tanning salon. In your
discussion, identify the best communication objective for each of the campaigns
and the product positioning strategy that you would use for each segment.
Justify your decisions.

Student answers will vary based on their personal response. Refer to the MyLab for
an opportunity to assign this question, and all starred MyLab questions, to a student
discussion board.

Heavy users do not constitute the best target for a campaign. You can only tan so
much. Average users can be encouraged to keep going, the objective being loyalty to
the specific salon. Attempting to move light users to higher levels would involve
some approach making increase tanning more attractive.

4-29. For each of the product-positioning strategies discussed in this chapter,
identify two brands that feature the strategy and explain how the strategy is
used to successfully market the brand.

Student answers will vary by brands chosen.

INTEGRATED LEARNING EXERCISES

4-30. Use a search engine to locate five companies on the internet that sell swimwear.

For each of the companies, discuss the types of products sold and the types of
promotional appeals used. Review each website. Describe the segmentation
strategy you think the company is using and the specific market segments being
targeted. For each company, which product-positioning strategy is being used?
Justify your choice.

Student reports will vary. Promotions will probably feature fashion, sleek/sexiness,
price, and quality.

4-31. A brand’s product-positioning strategy should be an integral part of the

company’s advertising and marketing strategy, including its website.
Examine the following websites and identify the product-positioning strategy
that you think is being used. Explain your choice.

a. Polaris (www.polarisindustries.com)
b. Edgewater Beach & Golf Resort (www.edgewaterbeachresort.com)
c. Celestial Seasonings (www.celestialseasonings.com)
d. Sony (www.sony.com)
e. Stetson cologne (www.stetsoncologne.com)

Polaris highlights the benefits of using the product. It may also be viewed as a

cultural symbol form of positioning.

Edgewater Beach positions itself as the only “full service” resort on Panama City

Beach, suggesting segmentation possibly based on income and possibility based
on customer benefit.

Celestial Seasonings is represented as a healthy and natural product line, which

suggests psychographics or benefit segmentation.

Sony emphasizes quality of its product lines. The company could target by

income, geodemographics, benefit, or usage segmentation.

Stetson tends to emphasize cultural symbols in its marketing. It targets males.

4-32. VALS psychographic segmentation can be a valuable tool for marketers as

they prepare their marketing materials. Access VALS through the Strategic
Business Insights (SBI) website at www.strategicbusinessinsights.com/vals
and examine the characteristics of each of the groups. Then take the test to
determine which group you belong to. How can VALS help marketers
develop advertising messages?

Students will receive different group locations based on their answers. VALS2
can then target the individual groups with more specific messages.

4-33. A current trend for many companies is the development of marketing

messages for specific demographic, ethnic, or lifestyle groups. This allows for
a more targeted message than is possible for the mass audience. Go to the
following websites. What types of marketing messages are on each site? How
could the information on these websites be used to develop integrated
marketing communication plans?

a. Parents (http://www.pbs.org)
b. Women (womensenews.org)
c. African Americans (www.targetmarketnews.com)
d. Gays and lesbians (http://www.gaycenter.org)

iVillage features sections on beauty and style, health and well-being, diet and fitness,
love and sex, pregnancy and parenting, house and home, entertainment, and
magazines.

WomensNews.org features articles about items including gender, gender roles,
babies, children for adoption, and other stories.Targetmarketnews.com has a wide
list of media featuring black performers and participants.

GayCenter.org features a he center that is the heart and home of NYC’s LGBT
community, providing programs for health, wellness and community connection.

4-34. For the following firms, examine the company’s website to determine what
segmentation strategy is being used. Describe the intended target market for the
website. What communication objective(s) do you think the company is trying to
accomplish? What product positioning strategy is being used? Explain your
responses.

a. Sara Lee Deserts (www.saraleedeserts.com)
b. Skeeter boats (www.skeeterboats.com)
c. Reynolds Protection (http://www.reynoldsprotection.com/protection.com)

Student answers will vary depending what is on the website at the time the students

access them.

4-35. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the

television ads for DuPage Medical Group, one of the television ads for
Terrebonne General Medical Center, and one of the ads for St. Francis Medical
Center. Identify which three ads you watched. For each ad describe who you
think is being targeted using the methods of consumer segmentation described

in the chapter. Define each of the approaches to product positioning described
in the chapter. For each of the three TV ads you picked, decide which
positioning approach is being used. Justify your answer.

Student answers will vary.

4-36. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the

television ads for Ouachita Independent Bank, one of the television ads for
Progressive Bank, and one of the ads for Centric Federal Credit Union. Identify
which three ads you watched. For each ad describe who you think is being
targeted using the methods of consumer segmentation described in the chapter.
Define each of the approaches to product positioning described in the chapter.
For each of the three TV ads you picked, decide which positioning approach is
being used. Justify your answer.

Student answers will vary.

Blog Exercises
Access the authors’ blog for this textbook at the URLs provided to complete these
exercises. Answer the questions that are posed on the blog.

4-37. Motel 6: http://blogclowbaack.net/2014/05/05/motel-6-chapter-4/

4-38. Carnival Cruise Line: http://blogclowbaack.net/2014/05/05/carnival-cruise-line-

chapter-4/

4-39. Segmentation and positioning:

http://blogclowbaack.net/2014/05/05/segmentation-and-positioning-chapter-4/

These exercises provide you with an additional tool to engage your students.

Student Project: Creative Corner

This exercise is designed to help students create ads for Yamaha Boats using the VALS2
typology of segments.

CASES

Case 1 THE JAPANESE STEAKHOUSE EXPERIENCE

4-40. Which consumer market segments best match with Benihana?

Student answers should note age (probably more targeted toward teenagers and
older), income (at least some disposable income), education (tied to income), and
benefit (enjoyment, fun). Ethnicity answers could be interesting, as the company
targets more than just Asians.

4-41. Explain the positioning approach used by Benihana.

Product attributes include a unique dining experience. Product user includes people
who enjoy dining out. Cultural symbol would be of Japan, not the United States.

4-42. If you were assigned to create a competitor restaurant that prepared and served
Japanese-style hibachi meals, which colors would you choose for the restaurant?
What type of music should be played? What other features should be key parts
of the interior of the restaurant? How would you differentiate the restaurant
from Benihana and other similar chains?

Student answers will vary. The colors would be festive, the music probably Asian or
“elevator music.” Other features would be unique cultural items that might somehow
make the experience different, if Benihana has a restaurant in the city.

4-43. For the same competitor restaurant, assume that it has only one location in
Seattle, Washington. Design an advertising campaign and identify the types of
media that would reach your target market and create the right positioning.

Local media might include a city-based magazine, newspaper, billboards or
outdoor, and radio. The campaign should be based on the goal associated with
reaching a target market (awareness versus loyalty for example).

4-44. The color red holds special meaning in Asian culture as a symbol of celebration.
Consequently, red is featured in much of Benihana’s marketing materials.
Which colors would match other restaurant types, such as fried chicken, fast
food hamburgers, or pizza parlors? Would your answer be different if the food
were to be sold in other countries? Why or why not?

Student answers will vary widely. In class, note that certain colors represent somber
elements, such as mourning or death. These should be avoided.

Case 2 Phase 2 Fitness Center

4-45. Explain each of the types of research presented in the chapter in terms of the

Phase 2 Fitness Center. Which would you recommend? Why?

Three primary research approaches include product-specific research, consumer-
oriented research, and target-market research. Student choices will vary

4-46. Discuss the potential consumer market segments that Phase 2 Fitness Center

could serve using the information on consumer segmentation. Which segment or
segments would you recommend? Why?

Student choices could include demographics (gender, age), psychographics (fitness
enthusiasts, benefit (get in shape), or usage (low, medium, high users.

4-47. Are there any business-to-business segmentation opportunities present? Why or

why not?

Definitely. The company could reach out to local firms and offer programs.

4-48. What positioning approach would be most valuable to Phase 2 Fitness Center?

Defend your answer

Choices include:
• Product Attributes
• Competitors
• Use or Application
• Price-Quality Relationship
• Product User
• Product Class
• Cultural Symbol

Student answers will vary.

4-49. Explain the most viable marketing communications objectives for the opening of

the Phase 2 Fitness Center. Then note how those objectives might change over
time.

Choices include:

• Reinforce purchase decisions

Student answers will vary.

MyMarketingLab

Go to mymktlab.com for the answers to the following Assisted-graded writing

questions:

4-50. A dog breeder recognizes the need for segmenting her advertising and marketing.

Discuss the merits of each of the methods of segmentation presented in the text (see

Figure 4.2). Based on your discussion of each method, which would you

recommend? Why? Define in your own words each of the product positioning

strategies. Based on your segmentation decision, which positioning strategy would

you use? Why?

4-51. Use a search engine to locate three companies on the internet that sell activewear. For

each website, discuss the types of clothing sold and the types of promotional appeals

used. For each website identify the market segmentation strategy you believe is being

used and the product positioning strategy that is being used. Justify your choice.

Bonus Case

BOSE: HIGH-END SOUND REPRODUCTION

A case can be made that sound reproduction has become one of the areas in which

technological innovations have made the most profound leaps forward. Leading the way

are major competitors such as Sony, Philips, Tivoli Audio, and Bose. Many forms of

sound delivery exist, some featuring earphones and headphones, and others through

stand-alone speakers.

The Bose Corporation began operations in 1964. Amar G. Bose, a professor of

electrical engineering at the Massachusetts Institute of Technology, became frustrated

during his attempt to purchase a high-quality stereo system. He believed that the speakers

that were available had impressive technical specifications but failed to reproduce the

realism of a live performance.

Four years later, the first Bose product reached the market. In a very short time, Bose

has delivered a series of innovations in sound.

Currently, the Bose Wave products are at the forefront of quality sound, including the

Wave radio, Wave music system, and Acoustic Wave music system. Each is designed to

deliver the most realistic sound through a compact, attractive device that will fit in any

room in the home or office. The product can be linked with a dock that both plays and

recharges an iPod. Another product allows the user to wirelessly play and store music

from an internet radio station. Other Bose products include headphones, home theater

systems, speakers, and sound systems for various locations, including boats and

businesses.

Bose systems are on the high end in terms of price. For example, the most widely

purchased Wave music system had a list price of $499.95 in November 2009. To entice

buyers, product discounts are routinely offered, including a $100.00 price reduction when

the Wave is purchased with the accompanying multi-CD changer. Also, Bose offers one-

year, interest-free financing.

The Bose marketing program includes use of traditional media, most notably

television, newspaper, and magazine advertising. The company’s website allows buyers

to find and purchase all items online. The company employs a limited number of retail

stores that feature the Bose line. The primary marketing emphasis remains focused on

quality. For example, Fortune rated the Bose QuietComfort headset, which cancels

outside noise, as the best-quality option for headphones.

Although a company’s reputation for quality may help to drive sales, outside factors

can interfere. The recession that began in 2008 and continued into 2009 led many

shoppers to cut back purchases, especially for more expensive luxury items. Bose was not

immune to this trend. The company was forced to lay off nearly 1,000 workers, or 10

percent of its labor force, during the decline.

At the same time, Bose forged ahead, seeking to develop new technologies in areas

other than sound. As the economy continues to recover, business analysts expect Bose to

build on its core products while moving into new areas, furthering the growth of this

innovative, energetic organization.

(1) Explain how the IMC planning process would apply to future marketing
efforts for Bose Wave products.

All of the elements would apply including context, customers, competitors, and
communications, market segments, product positioning, communication objectives,
budgets, and IMC components.

(2) Identify the market segments that the Bose Wave products should continue to
maintain.

Based on positioning, the target markets will be persons with higher incomes who
enjoy high quality music.

(3) Should Bose continue to compete based on the high-price/high-quality
positioning, or develop programs to reduce prices and entice a wider variety of
shoppers?

This is a discussion question, and student responses may vary. It may damage the
brand to try to move to any other than the current position.

(4) What should be the primary marketing communications objectives for Bose?

Student answers will vary; however, the primary objective may be to keep the brand
in the consumer’s mind when he or she is ready to make a new sound system
purchase. The company may also wish to inspire action, especially during higher
purchase seasons such as Christmas.

(5) What type of budget should be used for the Bose promotional program?

Student responses will vary; however, the objective and task may be best, given the
choice or marketing objectives.

(6) Which IMC components best match the target market, position, objectives,
and budget for Bose products?

Bose typically features television and magazine and Sunday supplement newspaper
advertising.

Integrated Advertising, Promotion, and Marketing Communications

Seventh Edition

Chapter 4

The IMC Planning

Process

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
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2) Math Player (free versions available)
3) NVDA Reader (free versions available)
1

Learning Objectives (1 of 2)
4.1 What makes marketing research critical to the IMC planning process?
4.2 What categories are used to identify consumer target markets or market segments?
4.3 What categories are used to identify business-to-business market segments?
4.4 How do the various approaches to positioning influence the selection of target markets?

Learning Objectives (2 of 2)
4.5 How do marketing communication objectives interact with the other elements of the IMC planning process?
4.6 How are communications budgets established?
4.7 What elements are considered in developing an IMC program?

Motel 6
Interview with Stan Richards
Client of The Richards Group
24 years
Focus Group
Themes
Save money
Benefit of frugality

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
This opening vignette is the result of an interview with Stan Richards, founder of The Richards Group. Motel 6 has been a client for 24 years. Initial research involved a focus group. Individuals were asked what hotels they patronize. Motel 6 was not mentioned initially. Finally, somewhat embarrassed, a participant admitted to staying at Motel 6. He then talked about the money he saved. Soon all of the group members remarked about staying at Motel 6 and being frugal. Out of this focus group the campaign and branding idea for Motel 6 was born.
4

Chapter Overview
IMC planning process
Communications research
Target markets
Positioning strategies
Communication objectives
IMC components

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
The IMC planning process involves a number of steps and decisions. Planning begins with research, decisions about target markets, market segmentation, and positioning. Once these factors are investigated and decisions made, then communication objectives can be created. A budget is then appropriated. The last part of the planning process is to think about the IMC components and how they will work together to create synergy.
5

Figure 4.1 The IMC Planning Process

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
The IMC planning process begins with communications research. From this research, decisions about the target market and product positioning can be made. These are joint decisions because one decision affects the other. Next, communication objectives are formulated. From the objectives come the budget and a selection of the appropriate IMC components. Again, it is a mutual decision because the budget impacts which IMC components can be used and the selection of the IMC components affects the budget.
6

Communication Research
Understand customers purchase benefits
Product-specific research
Key selling points
Desirable features
Consumer-oriented research
Context of product use
Anthropological approach
Sociological analysis
Psychological motives
Target-market research
Identifies feasible market segments

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
The first step in IMC planning is conducting research. If an advertising agency is used, then it is the responsibility of the agency to conduct this research so they understand the customer. What are the key benefits customers derive from the product? Consumers buy benefits, not attributes, so it is important to think in those terms, i.e. what does this product do for customers, how does it help them? Product-specific research involves identifying the key selling points of a product and the desirable features. To develop an advertising campaign, the creative staff should understand the product. Customer-oriented research focuses on the users of the product and how, when, and why the product is used. Researchers can use approaches based in anthropology, sociology, and psychology. A common method used by agencies for customer-oriented research is the focus group. Target-market research utilizes the information gathered through product and customer research to determine the best target market for the brand, product, or particular campaign.
7

Tests to Determine if a Particular Market Segment is Viable
The individuals or businesses within the segment are homogeneous.
The market segment is different from the population as a whole and distinct from other market segments.
The market segment is large enough to be financially viable to target with a separate marketing campaign.
The market segment must be reachable through some type of media or marketing communications method.

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
To be a viable market segment, it must meet four criteria. First, the individuals or businesses within the segment should be homogeneous, that is they should be alike. Second, the market segment must differ from the general population and also be different than other market segments. Third, the market segment has to be large enough to be financially viable to support a separate marketing campaign. While some market segments meet the first two criteria, they are too small to support a different campaign. Based on the last criteria, the market segment must be reachable through some type of media or marketing communications method. There are some market segments in Africa and other parts of the world that meet the first three criteria, but not the fourth. There is no feasible way to reach them with a marketing message.
8

Figure 4.2 Methods of Segmenting Consumer Markets
Demographics
Psychographics
Generations
Geographic
Geodemographics
Benefits
Usage

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Consumer markets can be segmented, or divided, along a number of dimensions. The most common is demographics because it is the easiest. Other methods used include psychographics, generations, geographic, geodemographics, benefits, and usage.
9

Gender Segments Based on Demographics
Gender-based products
Gender differences in communications
Female consumers
Control 66% of spending ($12 trillion)
Involved in purchasing high-priced electronics (96%)
Deal with financial advisors (90%)
Buy and sell stocks (80%)
Household’s primary accountant (70%)

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Gender is a common demographic segmentation variable because there are significant differences between males and females and because it is easy to identify each market segment. Men and women purchase different products. They also use the same products, but in different ways. The way marketers communicate to the genders can vary. For instance, females now control about $12 trillion in spending, or 66%. They are involved in product purchases that in the past were dominated by males. For example, 90% of women are involved in purchasing high-priced electronics, 90% deal with financial advisors, 80% buy and sell stocks, and 70% are their household’s primary accountant.
10

Tips for Marketing to Women
Focus on how brand can improve life
Engage them with the brand
Focus on practical, not trivial
Tell a story that resonates
Provide details
Be positive

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
(Bonus slide, not in text) When marketing to women, a few tips should be observed. 1) The focus should be on how the brand can improve the woman’s life, not on what the brand can do. 2) It is important to engage the female with the brand and make her feel a part of the brand. 3) Focus on the practical, not on the trivial. Women want to know the facts and how a product can benefit them. 4) Tell a story that resonates. Women like stories, they like brands that create feelings and emotions among people. 5) Provide details. While it may seem unimportant, it is not. Women want all of the information so they can make good decisions. 6) Be positive. Negative selling doesn’t work.
11

Marketing to Mothers
Buyers of iPhones
Like media websites
Share photos/news
20% of online users
Largest web spenders
Online
Mobile devices

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Mothers represent an attractive market. They are the fastest growing buyers of iPhones. They listen to Pandora and access other media sites more often and listen longer than the average consumer. They share news and photos on Facebook. They represent 20% of online users and a higher percentage of mobile users. They spend on the web either through mobile apps or directly online.
12

Marketing to Men
Shopping more
Focus on product performance
Prefer looking for specific information
Favor products that reflect status
Like well-known brands

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Men are shopping more now for clothes, groceries, and other types of home supplies. Men tend to focus on a product’s performance more than its appearance. They do not like to browse; they prefer companies providing specific information about a product or brand. They prefer products that reflect status and demonstrate a wise purchase decision, which is why they tend to favor well-known brands, especially brands with status.
13

Age Segments Based on Demographics
Target specific age group
Combine with other demographic variables
Children attractive group

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Age is another demographic variable that is easy to use for segmentation. Obviously, there is a huge difference in the products children use versus the products adults use. Differences are also present between someone 20 and someone 70. Few marketing messages resonate with all age groups. Therefore, focus on a specific age group. Age segmentation often works well when combined with another demographic variable, such as males ages 20 to 35, or females 18 to 40. One age group that is attractive to marketers is children. Children spend $30 billion a year themselves and influence another $500 billion. It is not just toys they influence. Children influence parents on the purchase of everything from food to cameras to furniture to vehicles.
14

Figure 4.3 Influence of Tweens
Influence/Opinion Percent
Want instant gratification 56%
Want customized product 59%
Want what others have 41%
Sometimes visit online stores 31%
Shop online 28%
Influence on household purchases Blank
Movies 55%
Food 29%
Personal care products 26%
Family vacation destination 27%
Technology 23%

Source: Based on Lucia Moses, “Tweens Have a Big Say in Household Spending,” Adweek, adweek.com, June 26, 2013.

Income
Closely related to education
Lower income – necessities
Higher income – luxuries
Ad directed to “exhausted affluent”

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Other demographic segmentation variables include education and income. Each can be used alone, or combined with other demographic variables to create smaller, more homogeneous segments. This ad for Thomasville furniture is directed to a segment called the “exhausted affluent.” The exhausted affluent bridge the gap between the haves and the have nots. They desire style and quality, but not something overly fancy.
16

Ethnicity
Buying power – $2.5 trillion
Significant part of identity
Need to understand ethnic groups
Translation insufficient
Holistic approach

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Ethnicity is an important demographic variable since minorities control $2.5 trillion in buying power. For many, ethnicity is a significant part of their identity. It is important to create advertising that understands each ethnic group. Translations of white ads is not sufficient. In recent years, advertising agencies have moved to a “holistic” approach. Rather than creating separate campaigns, they are designing a single campaign that incorporates insights from various ethnic groups.
17

Psychographic Segmentation
Describe consumers
AIO measures
Activities
Interests
Opinions
Combine with demographic profiles

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Demographics are relatively easy to identify, but they do not fully explain consumer purchase behavior. Psychographics are an individual’s activities, interests, and opinions. They help marketers to understand why consumers buy what they buy. Psychographics are often combined with demographic profiles to provide a much richer description of a target segment.
18

VALS Psychographic Segmentation
Innovators – successful, sophisticated – upscale products
Thinkers – educated, conservative, practical – durability, value
Achievers – goal-oriented, conservative, career, and family
Experiencers – young, enthusiastic, impulsive, fashion, social
Believers – conservative, conventional, traditional
Strivers – trendy, fun-loving, peers important
Makers – self-sufficient, respect authority, not materialistic
Survivors – safety, security, focus on needs, price

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
A well-known measurement of psychographics is the VALS typology. Consumers are divided into 8 different segments based on their AIO measures (activities, interests, and opinions). This type of information helps marketers design more effective communication. For instance, reaching achievers requires ads that stress careers, families, goals, and a conservative lifestyle. On the other hand, reaching experiencers requires ads that convey youthfulness, enthusiasm, impulsiveness, fashion, and social acceptance.
19

Figure 4.4 Characteristics of Generation Segments
Name of Segment Year of Birth Characteristics
Millennials 1978-2002 Spend money on clothes, automobiles, college, televisions, and stereos. Ninety percent live at home or in a dorm or rent an apartment.
Generation X 1965-1977 Focus on family and children. Spend on food, housing, transportation, and personal services.
Younger Boomers 1954-1964 Focus on home and family. Spend on home mortgage, pets, toys, playground equipment, and large recreational items.
Older Boomers 1952-1953 Spend on upgrading homes, ensuring education and independence of their children, and luxury items, such as boats.
Seniors Up to 1951 Most have fixed incomes. Spend heavily on health care and related medical items.

Source: Author-created from Dana-Nicoleta Lascu and Kenneth E. Clow, Marketing Principles (Cincinnati, OH: Textbook Media Press, 2012).

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Markets can be segmented based on generations. This table shows the five major generation groups, when they were born, and the primary characteristics of each group. The idea behind generation segmentation is that people who grow up experiencing common events will become similar in their AIO measures. These groups often enjoy the same music, foods, and products.
20

Ad Targeted to Seniors

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
According to generation segmentation, seniors have a fixed income and spend heavily on health care and related medical items. This St. Francis Medical Center ad is targeted to seniors informing them that St. Francis is first in orthopedics and foremost in hip replacement.
21

Geodemographic Segmentation
Combines
Demographic census data
Geographic information
Psychographic information
PRIZM
66 market segments
Southside City
Towns and Gowns

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Geodemographic segmentation combines demographic information, geographic information, and psychographic information. Geodemographic segmentation is beneficial for national firms conducting direct mail campaigns and for retailers in targeting customers in a geographic area around the store. The most well known geodemographic segmentation system is PRIZM. It consists of 62 different market segments. For every zip code in the United States, PRIZM identifies the market segments that reside there. For instance, in downtown Jackson, MS the two primary clusters are “Southside City” and “Towns and Gowns.” The Southside City cluster contains primarily young and elderly African-Americans, who are employed in low-paying blue-collar jobs, have lower education levels, rent apartments, and read sports and fashion magazines.
22

Benefit Segmentation
Fitness Industry
Winners
Dieters
Self-improvers

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Benefit segmentation focuses on the advantages consumers receive from a product rather than the characteristics of the consumer. An excellent example of benefit segmentation is the fitness industry. People exercise for different reasons. The three most common benefit segments are winners, dieters, and self-improvers. The winners exercise because they like to exercise. It is a way of life for them. The dieters join a fitness center to lose weight, or maintain their weight. Self-improvers are there primarily because a physician told them to be there. They have experienced a medical problem and realize they must exercise to regain body functions or maintain their health.
23

Usage Segmentation
Usage or purchase history
Create clusters
Target specific clusters
Create marketing programs for each cluster
Measure growth and migration

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Usage segmentation focuses on how consumers use a product or on their purchase history. Marketers can create clusters of heavy users, light users, or any other category of users. By dividing the market in terms of usage, companies can target a specific cluster creating a unique marketing approach. The message to a light user of a product will certainly be different than a heavy user of a product. One of the goals of targeting light or average users is to move them up into a higher group in terms of usage.
24

Figure 4.5 Methods of Segmenting B-to-B Markets
Industry (NAICS/SIC codes)
Size of business
Geographic location
Product usage
Customer value

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Segmentation in business-to-business markets can be based on industry, size of businesses, geographic location, product usage, or customer value. Because most businesses have records of their business customers, segmentation is often easier than with consumers, at least in identifying customers. NAICS codes are one of the most popular methods of segmentation because the federal government has developed the code and there are lists of businesses within each code. Segmentation based on size is necessary when a firm wants to focus on small firms, medium-size firms, or even large firms. Industries often locate together, e.g. computers in the Silicon Valley in California. How firms use a product can be a method of segmentation and the value of customers. Many packaged goods manufacturers have a Wal-Mart team to service that account since it is so large and has such value.
25

Segmentation by Geographic Location
A business-to-business ad that can be targeted to a specific NAICS code.

Product Positioning
Is the perception created in the consumer’s mind regarding the nature of the company and its products relative to the competition?
Positioning is created by factors such as product quality, price, distribution, image, and marketing communications.

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Product positioning is the perception in consumers’ minds of the nature of a company and its products relative to competitors. It is important to recognize the two major points – in consumers’ minds and relative to the competition. Positioning is created by factors such as product quality, price, distribution, image, and marketing communications. Companies need to consider carefully where they are positioned in the market place and then develop ads to reinforce that image or move consumers to the image that is desired.
27

Figure 4.6 Product Positioning Approaches
Product Attributes
Competitors
Use or application
Price/quality
Product user
Product class
Cultural symbol

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Effective positioning can be accomplished in seven different ways. Positioning by product attributes involves promoting a unique attribute that is superior or different from the competition. Using competitors to establish a position can be accomplished by contrasting the company’s brand against competing brands. Use or application involves creating a memorable set of uses for a product, or applications that allow it to stand out. Price/quality positioning can occur in two ways – by emphasizing value (low price) or by emphasizing high quality, with little mention of the higher price. The product user approach emphasizes who uses the product, such as educators for Apple computers. Positioning can be based on the product class, such as beverages, breakfast foods, or sports cars. The last approach is cultural symbol, which strives to connect the brand to some cultural symbol that is recognized and known by consumers.
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Elements of Positioning
Never completely fixed
Applies to business-to-business also
International positioning important
Critical component of image and brand management

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Product positioning is never fixed because consumers and society change. The same holds true for business products. In the international arena, product positioning is very challenging, but important. However, the position that is used in one country may not be appropriate for another country. Product positioning is a critical component of image and brand management because it is how consumers (or businesses) view the brand compared to competing brands.
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Marketing Communications Objectives

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An effective IMC planning process requires quality communications objectives. These objectives tie the organization’s context, target markets, and positioning approaches to the selection of budget figures and IMC components. Communication objectives also guide account executives and advertising creatives in designing the actual advertising campaign.
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Figure 4.7 Communication Objectives
Develop brand awareness
Increase category demand
Change customer beliefs and attitudes
Enhance purchase actions
Encourage repeat purchases
Build customer traffic
Enhance firm image
Increase market share
Increase sales
Reinforce purchase decisions

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This is a list of common communication objectives. Most IMC campaigns will emphasize one communication objective, but may accomplish other objectives in the process. There are some logical combinations, such as developing brand awareness and building customer traffic. Increasing market share would fit with increasing sales and encouraging repeat purchase actions. The key is to match the objective to the medium and the message.
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Figure 4.8 Methods of Determining Marketing Communication Budgets
Percentage of sales
Meet-the-competition
“What we can afford”
Objective and task
Payout planning
Quantitative models

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Companies have a number of ways of determining a communications budget. Setting budgets for large companies with multiple brands and products is often more challenging than with a small company that may sell only one brand or a few products.
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Types of Budgets
Percentage of Sales
Sales of current year, or next year
Simple
Tends to work in the opposite direction
Does not meet special needs
Meet the competition
Seeks to prevent market share loss
Highly competitive markets
Dollars may not be spent efficiently

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The percentage of sales method sets the communication budget as a certain percent of this year’s sales or next year’s sales forecast. It is simple to use, which makes it a popular choice. However, it works in the opposite direction of what may be needed. When sales increase, so does the budget. When sales decline, the budget is reduced. It should be just the reverse. It also does not allow for special needs that may rise. Meet-the-competition sets a budget approximately equal to competitors. This approach is used in highly competitive markets where you have to spend what the competition does to keep your brand in front of consumers. Spending the same as competitors does not guarantee success.
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Figure 4.9 Ad Spending, Brand Recognition, and Market Share
Auto Insurer Ad Spending (millions) Brand Recognition Market Share
Geico $600 98% 8.2%
Progressive $506 92% 7.5%
State Farm $455 76% 18.6%
Allstate $369 63% 10.5%
Farmers $203 59% 6.4%

Source: Adapted from Gregory Bresiger, “It’s Ad Infinitum,” New York Post, May 1, 2011, nypost.com.

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In terms of total marketing expenditures, approximately 41.1% is spent on some form of advertising. Consumer promotions account for 27.9% and trade promotions for 27.5%. These percentages will vary from industry to industry. It will also be different for products and services, and for consumer companies and B-to-B firms.
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Types of Budgets (1 of 2)
What we can afford
Set after all other items budgeted
Do not view marketing as important
Objective and task
Budgets determined by objectives
Best method of budgeting
Used by 50% of firms

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The “what we can afford” approach sets the communications budget after all of the other budges are set. Normally, with this approach, management does not see the importance of communications. The objective and task method sets the budget based on what it will cost to accomplish the communication and marketing objectives that have been established. Most marketers see this as the best method of budgeting. It is now being used by about half of all firms.
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Types of Budgets (2 of 2)
Payout planning
Ratio—advertising to sales or market share
Larger percent at product launch
Lower percent when brand established
Based on threshold effect
Quantitative models
Computer simulations
Develop models based on historical data

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Payout planning involves setting a budget based on a ratio to sales or market share. This method usually results in spending more money early in the process and then reducing the budget after the brand is established. Quantitative models use historical data to determine the relationship between sales and marketing and then budgets are set accordingly.
36

Communication Schedule
Pulsating schedule
Flighting schedule
Continuous schedule

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Communication budgets can be scheduled in three different ways. A pulsating schedule involves advertising throughout the entire year with bursts of additional spending at select times, such as holidays. A flighting schedule allocates the budget only during peak times, with no other times during the year. The continuous schedule divides the budget equally throughout the entire year.
37

IMC Components
Traditional advertising
Trade promotions
Consumer promotions
Media spending
Alternative media spending
Business-to-business media spending

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The last decision (in conjunction with the budget) is the selection of IMC components. Traditional advertising cannot be ignored in favor of newer, nontraditional methods. Companies have to think about how much is needed for trade promotions and consumer promotions. Then, there is the actual spending on media. Some companies will also have to consider business-to-business spending. It is not an easy task to determine which components will be the most effective. Not only is the budget a factor, but also the objectives.
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Figure 4.10 Breakdown of Marketing Expenditures

Figure 4.11 Global Ad Spending by Media
Source: Based on Ingrid Lunden, “Nielsen: Old School TV Reigns Supreme at 58% of Ad Spend, Internet Display up 27% in Q2,” techcrunch.com, October 22, 2013

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When examining global ad spend, television is still where most dollars go with 57.6%. Newspapers are second with 18.9%, followed by magazines at 10%. Although digital is only 4.3%, it is the fastest growing medium.
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Figure 4.12 Successful Globally Integrated Marketing communications Tactics
Understand the international market
A borderless marketing plan
Thinking globally but acting locally
Local partnerships
Communication segmentation strategies
Market communication analysis
Solid communication objectives

Copyright © 2016, 2014, 2012 Pearson Education, Inc. All Rights Reserved.
Successful globally integrated marketing communications require paying attention to a number of factors. The company must understand the international market and cultures where it will be selling products. A borderless marketing plan works best, but in developing this type of plan, firms must allow individual countries to modify the marketing plan. The idea is to think globally, but act locally. Seeking local partnerships can be very advantageous, especially in developing communication segmentation strategies and conducting a market communication analysis. With this information, solid communication objectives can be established.
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Integrated Campaigns in Action
Progressive Bank
mymktlab.com

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Progressive Bank is a local bank that operates in a competitive market. French Creative developed a strong integrated communications campaign that involved multiple approaches and multiple media. This integrated campaign can be found at the Pearson instructor’s Resource Center at www.pearsonhighered.com. Other integrated campaigns can be found at the textbook authors’ website at www.clowbaack.net and through the authors’ blog at http://blogclowbaack.net.
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Blog Exercises
Motel 6

Carnival Cruise Line

Segmentation and Positioning

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The blog exercises for Chapter 4 include Motel 6, Carnival Cruise Line, and videos about segmentation and positioning. Links are embedded in the text for each.
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