Week Four

Although we only had one class last week, there was an extensive amount of information that we learned and that is applicable to not only school, but to our lives.

This week's focus was on consumer decision making and market segmentation. In class, we talked extensively about products that we would buy with different types of decisions involved. For example, a laptop would be an example of an extensive decision making process while a candy bar would be an example of routine response behavior. My group discussed how coffee would be an example of habit forming or brand loyalty because people tend to only buy the brand of coffee they like (i.e. Dunkin' vs. Starbucks). Finally, we talked about how shampoo and conditioner might be a limited decision making process because it may involve a decent amount of information searching for a product that works for you, but also has a lower level of involvement, or risk. We used the following matrix to come up with our choices:

In class, we also watched an episode of Shark Tank for the product Bambooee. This product is a bamboo "paper towel" that can be washed and reused instead of using disposable paper towels for each use. Bambooee is a perfect example to use when looking at market segmentation. A market can be segmented based on geography, demographics, ethnicity, family life cycle stage, psychographics, benefits, and usage.

Before we watched the episode, each student was assigned a different market segment as defined by Claritas. For example, my market segment was 08 Gray Power. This segment of the consumer market consists of older adults (usually 55+) who have/had a high income. These people also generally don't have kids and live in the suburbs relatively close to downtown jobs, restaurants, and shopping areas. According to Claritas, they might be seen driving a Lexus, shopping at Chico's, or visiting Alaska.

After we watched the episode, we were tasked with designing a print ad catering to our market segment. My ad is pictured below.

I chose to focus on the values, such as time and money, that this segment might appreciate in order to spend more time doing the things they enjoy. Additionally, I found that my market segment is not found in Springfield or in my hometown of Ellington, CT. I was not surprised by these findings based on what I already knew about the populations of both places.

I think market segmentation is extremely important to understand in order for any business to be successful. This way, they can find the target market(s) that fit(s) best with their product. In order to do this they might select an undifferentiated market, or one that has no segmentation to save on production and marketing costs. They may also use concentrated targeting to find a niche or narrowly defined market. Finally, they may use multisegment targeting to focus on 2 or more market segments each with distinct marketing mixes. This is the strategy that I think would work best for Bambooee because they can market their product in different ways that would make it appealing to many different types of people.

Finally, this can be extremely useful in our smart project. Last week, I discussed how it would be important to understand how consumers make decisions in order to market the product effectively. To me, market segmentation is an extension of this process. If we can understand how our target markets might be separated, we will be better able to tell what will influence their decision.

For example, our specific project, the device to help someone remember their keys is separated immensely by age. We could target the lazy, forgetful college student who isn't used to carrying his or her keys around. We could also target the soccer mom that is always rushing from place to place. Finally, we could target the older adult who may be starting to have trouble remembering things he or she has done for a long time. Clearly, this market is segmented by age. By understanding this, we will be able to determine how each of these people make their decisions in order to best market our product using multisegment targeting to each distinct group.

I'm looking forward to seeing each group's concept designs this week in class, as well as seeing the different print ads my classmates have come up with based on their market segment.

Until next week!!

-Kristen