Chapter 10: Target Market Flashcards
(16 cards)
Why is it important to identify consumer/target market for a product?
most products will not appeal equally to all consumers, so marketing strategy can be tailored to their wants & needs
Describe segmentation
- the division of the market place into distinct subgroups or segments, each chracterisited by particular tastes and require specific marketing strategy
- target market for any product may be one or more of these segments
- complex as everyone diff, consumers in a segment aren’t identical
- aim is to choose a group who have sufficiently similar pref & needs to create a meaningful segment that can be targeted by companies
- segments shouldn’t be so small, with so few customers as to make it unprofitable
- often based on four sets of variables
- no global model, each country different;
Describe the 4 sets of variables in segmentation
- geographic variables: related to where customers live (country, region, city) and whether urban or rural; usually too broad & cover too wide of ppl to be meaningful on their own
- demographic variables: age, gender, ethnicity, family status (single/fam), income, education level, occupation, socioeconomic status (position in society relative to others in their income/education/occuption)
- psychographic variables: psychological characteristis like: lifestyle (going out to eat/drink, health-conscious), personality (show off wealth/knowledge of wine), values & beliefs (eg vegetarians, organic, environ friendly), interests (ppl interested in wines fr a country or region)
- behavioral variables: variables based on consumers observable behaviors: the benefit they want from wine (quality, value, prestige); when they drink wine (regularly, special occasions); where they buy (supermarket, specialist); how often & in what vol; their level of brand loyalty; level of interest in wine (enthusiast, moderate, indifferent); early vs late adopters
ppl who share pscyhological or behavioral traits likely to behave similar than those who live in same area or in same age group
What’s the closest wine industry has come to creating global wine segments? Explain these segments
industry separates high vs low involvement, although this division is not valid in all countries and the grouping is too broad to be useful without further segmentation
* high-involvement customers: have deep interest in wines they drink, keen to try new products, tend to spend more on wine
* low-involvement customers: little interest in the detail of their drink, stick to few products they know, unlikely to spend much on wine
Describe an example of a narrower wine consumer segments in context of wine tourism. What are issues with this segmentation and others similar to it?
Hall split wine consumers into 3 groups (more in the context of wine tourism not wine buying):
* wine lovers: those w/ great interest in & knowledge of wine, high income, high level of education
* wine interested: great interest in wine, moderate wine knowledge, university-education w/ moderate income
* wine curious: moderate interest but limited knowledge, medium level of education, wine as an opp to maintain social relations
Issues:
* level of interest & wine knowledge useful to separate wine consumers, but too simplistic to link to income & level of education
* models tend to be result of academic studies w/ small sample size, doesnt extend to market as a whole
Describe Wine Intelligence & its segmentation models. What are their advantages vs disadvantages?
- market research company, Wine Intelligence, create series of models for various markets (UK, US, China), which can be much more detailed
- can provide a range of additional info to help companies understand these segments - break down each into demographic groups, level of involvement, wine buying habits, motivations & behaviors
- have to pay for access (disadvantage) but can help companies target specific types of wine consumers successfully (advantage)
- plenty of consumers dont fit into any one segment (disadvantage)
- segmentation exercise helps identify type of consumer who might buy particular product - help company make realistic estimate of how much they’re willing to pay for it, where to sell it, how to best market it
Describe market research
- the gathering & analysis of data about a particular market segment in order to understand what the segment needs/wants
- useful at all stages of marketing process - for new product, can use to understand if there’s demand in the market and what features ppl would like to have and how much to pay for it
- important in creating market strategy as it confirms whether the approach suggested by segmentation exercise is accurate or not b4 comp embarks on expensive/time-consuming marketing campaign
- market research takes time & effort to arrange; focus groups expensive
Describe what needs to be considered when setting out the aim of market research.
- WHAT info is needed (eg what price will they pay)
- WHO will they gather data from (eg small group from a segment or cross-section of the public)
-
HOW will research be carried out?
1. survey: series of Q’s designed to investigate opinion/feelings/actions/behaviors of a large group of ppl
1. focus group: small group drawn from relevant consumer segment, brought together to discuss/comment on topic researched
1. interviews: 1-1 discussion of topic researched
1. observing consumer behavior (see observing consumer behavior)
1. secondary research: market research carried out by using data already available in public domain or avail as report from a market research company
Wine Integllience US Portraits
Engage Explorers:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: younger, confident wine drinker who enjoy discovering new wines
- Why: part of their lifestyle/social life, so they spend time & money on it
- Where: buy from shops & wineries; highest spender on/off prem
- What: broadest repertoire, enjoy try new variety/region/types of wine
Wine Integllience US Portraits
Premium Brand Suburbans:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: mid to older age, frequent wine drinker, lower spending but very knowledgeable
- Why: enjoy wine in social situation in on-prem for casual occasions
- Where: supermarket or known wineries, often in bulk for value
- What: very broad repertoire, they know what they like & prefer domestic regions
Wine Integllience US Portraits
Contented Treaters:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: infrequent, but high spending drinker, who know what they like
- Why: have wine infrequently but enjoy as social situation as a treat or w/ dinner
- Where: liquor store, wine shops, wineries they visit to stock up
- What: know what they like, stick to mainstream variety, preferably domestic regions
Wine Integllience US Portraits
Social Newbies:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: youngest segment, drink fairly frequent, rely on recco due to lack of knowledge
- Why: consume on-prem & social situation w/ fam/friends
- Where: convenience main factor, many relevant channels
- What: explore the cateogyr, enjoy trying more niche varietals & regions of origin
Wine Integllience US Portraits
Senior Bargain Hunters:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: most infrequent, one of oldest segments w/ good knowledge due to long time in category
- Why: low confidence in their knowledge, wine drinking centers around casual occasions at home
- Where: supermarket, they are value driven
- What: despite knowledge of variety & regions, they stick to what they know, drink from narrow repertoire
Wine Integllience US Portraits
Kitchen Casuals:
WHO are they?
WHY they drink wine?
WHERE?
WHAT do they drink?
- Who: one of the oldest, very infrequent drinking; little interest in category
- Why: little understand about wine, little interest to learn more; drink at home for informal occasions
- Where: price conscious - so supermarket
- What: drink from narrow repetoire, stick to what they know
Describe observing consumer behavior as a market research method
- observe & analyze behavior of target consumer
- to find out wants & needs OR used later in marketing process to monitor success of campagn & make adjustments
- methods: watching how they move around a shop, interact w/ consumers (retail/hospo staff), store loyalty cards (records of purchases), web analytics (which pages ppl visit, how long) or academic studies research factors that influence consumer behavior (eg lighting, music, decor)
How does marketing influence consumer behavior
- can focus consumers attention on something they need or want, or draw attn to products consumer didn’t previously know they wanted
- can direct consumer to where they can buy the product (advert for local wine shop)
- highlights selling points of the product (eg luxury status, organically grown, competitive price, etc) and thus influence evaluation of alt avail and final purchase decision
- therefore understanding the consumer is useful data to ensure marketing strategy is effective as possible
