Motive
A reason for behavior.
Lifestyle
A pattern of attitudes, interests, and op inions held by a person.
Organ izational markets
A market consisti ng of those organizations who buy products or serv-
ices for their businesses, for use in making other products, or for resale.
Standard industrial classification (SIC)
A U.S . government publication that classifies business
firm s by the main product or service provided.
Single-base segmentation strategy
The use of a single base to segment markets.
Multi-base segmentation strategy
The use of two or more bases to segment markets.
Clarity of identification
The degree to which one can identify those in side and those outside the
market segment.
Actual need
Overt demand for existing goods or services.
Potential need
A need that can be changed into perceived wants through such means as educa-
tion or persuasion.
Effective demand
Actual or potenti al needs existing along with purchasing power (income, sav-
ings, and credit) belonging to members of a market segment.
Economic accessibility
Members of a market segment must be reachable and profitable.
DISCU SSION QU ESTIONS
1. What makes the concept of market segmentation different from that of product differentiation ?
2. What are the advantages that market segmentation has over aggregate or mass marketing?
3. What criteria would you use to determine whether the toothpaste market should be grouped into a "dri nker's toothpaste" segment? A " business person 's toothpaste" segment?
4. Why is demographic segmentation alone not always a sufficient means of target market iden ti -
fica tion? Suggest a better method.
5. Assume that you have been hired by a film to segment the market for replacement tire s. What segmentation bases would you use? What pitfalls should you be susp icious of?
6 .
List the steps in the market segmentation process.
7. Describe the means by which industrial reseller markets can be segmented.
8. Segmen tation is really an aggregation process. Explain .
9. Is a multi-base segmentation approach always better than the use of a single segmentation base?
10. Do you think that there are distinct market segments for personal computers? If so, what are the characteristics? If not, why not?
CASE APPLICATION
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PROJECT
Go through a cross-section of consumer and business magazines. Clip out ads that you feel represent at least five bases for segmentation. Select one and apply the criteria of a valid segment. Write a two-page report.
CASE APPLICATION
ROLLING ROCK FINDS ITS NICHE
On the back of each long-neck bottle of Rolling Rock beer, a bold but simple "33" stands out. Plain white on the dark green glass, the number sits enclosed in quotation marks, squarely below a block of type, daring the drinker to discover its meaning.
Since] 939, when the brew from Latrobe, Pennsylvania, made its debut, that "33" has been captwing the imagination of consumers. Fans of the beer steadily wrote Latrobe Brewing Co., trying to discem the significance of the number. Theories abound , but if anybody knows the real story, they haven't told-which only adds to the "33" mystique.
This natural marketing hook, however, remained untapped for most of the beer's history. The
company rarely ran promotions and its advertising did little to bolster the "33" myth. Rolling Rock was just another beer saddled with a blue-collar image, and in the white-collar 1980s sales began to decline steadily.
Things began to change for Rolling Rock in mid-1987, when Labatt's USA acquired Latrobe
Brewing. The new owner, who recognized a good thing, brought in a Dallas-based promotions agency, The Marketing Continuum, and ad agency, Hill, Holliday, Connors, Cosmopulous, to take advantage
of the "33" legend.
The agencies believed that by playing up the number, they could preserve the brand's unique
personality. They also sought to reposition Rollin g Rock as a super-premium brand and saw "33" as the vital link to its long history, distinctive packaging, and special aura.
How successful has the new strategy been? Sales during the first two months climbed fifteen
percent from the same peliod a year earlier. The repositioning has also paid off nicely. The brand's primary audience is no longer college students and blue-collar workers. The demographic on today's average Rolling Rock consumer shows a 21 to 35-year-old white-collar male eaming $40,000 or more per year.
David Mullen, executive at TMC, says it was clear early in his company's relationship with
Rolling Rock that the kind of "me too" bikini advertising, which has homogenized so many of the major beers, would be a poor direction for this brand. That's because Rolling Rock was a niche brand trying to capture the attention of consumers and distributors in a saturated market. The marketing mind s behind Rolling Rock, Mullen says, saw a window of opportunity in the super-premium segment, where brands like Michelob and Lowenbrau were losing their allure with consumers who wanted something unique. So Mullen and his cohorts devised a successful program that continues to stress the "specialness" of the brand.
Source: Kathy Thacker. "Solutions: Winning Number," Adweek (October 28, 1999): pp. 40--41.
Questions:
1. Despite the apparent success of this new marketing strategy designed by TMC, there are poten-
tial problems with the segmentation approach employed. Discuss these problems.
2. Discuss other possible bases for segmentation that Rolling Rock could have used.
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