Introduction to Marketing

S E G M E N TAT I O N A N D
TA R G E T I N G
Week 05
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
In Our Classroom
Welcome!!!
• Participation
• Asking questions about
topics
• Focusing
STOP!!!
• Texting
• Calling
• Sleeping
• Personal / private chatting

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Reminders #1: Email
Remember
E-mail:
◦ When you send me an e-mail, please follow the guideline:
◦ The title of the email begins with “[B41]” or “[B45]” based on your class
section + the topic
◦ e.g., [B41] Question about course material
◦ e.g., [B45] Question about team assignment
◦ If not, I may miss your e-mail so that you may not receive my reply

Review your course materials after each class

Do not hesitate to ask if you have any question or any suggestions
about this course

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR. 3

E-Mail Rule:
When You Send Me an E-mail…
If this is about
your team
assignment,
please CC all your
team members

Title of your e-
mail

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Reminders #2: Team Assignment
Remember
Team assignment #1 due date is coming (2 weeks)
In Week 06 (next week), we will have “Supervised Work Session (mandatory)”
You must submit an electronic copy (MS DOCX file) of your company analysis
report at the beginning of Class 7 on ZoneCours.
Your submission time is the timestamp on ZoneCours
Only the last submission will be valid and counted.

There is no excuse for late submission

Checking for submission is your duty

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Reminders #2: Team Assignment
Remember

Must be max 5 typed pages, excluding appendices

11-pt Arial font with 1.5 line spacing

The information in the appendix must be related to the main text

Must always cite within the text (in the footnotes or endnotes) the exact source of
your information
◦ You can lose up to 10% per assignment for failure to cite your sources!
◦ + “References“ needs to include all of your references.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Bibliography / References
Must always cite within the text (in the footnotes or endnotes) the exact source of
your information
◦ You can lose up to 10% per assignment for failure to cite your sources!

If you don’t know about styles of citations, you can use APA, Chicago, or any
others
◦ [Link]

You must put all of your

references at the end of your
writing as “References”
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Document Style Guideline
Please submit MS word docx file not PDF

Must be max 2 typed pages, excluding appendices

11-pt Arial font with 1.5 line spacing

◦ Margin of top, bottom, Left, and right: minimum 1 inch
◦ File type: MS docx
◦ DO NOT WRITE OVER PAGE LIMITS (NO EXCUSES)
◦ DO NOT CONDENSE between letters (convert letters to normal, then, if over page limits,
pages after limits will not given points)

The information in the appendix must be related to the main text

You can use MS Word template file on ZoneCours

Writing within the limits is also one of the goals that you need to achieve through higher
education
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Document Style Guideline
If you do not follow the document style guideline,
◦ Your document will be adjusted as guideline e.g.,
margin, line spacing, font, etc…
◦ Then, if the pages are over limits, I and grading
assistants will read only within the page limits
◦ This can lead to your point deduction

PLEASE FOLLOW THE RULE. NO EXCEPTIONS. NO

EXCUSES.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR. 9

Brand vs. Parent Company

[Link]

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR. 10

Last Time…
◦ Consumer Behavior
◦ Consumer Decision Making Process
◦ Recognition of a need
◦ Information search
◦ Perceived Risk
◦ Evaluation of alternatives
◦ Non-compensatory model
◦ Compensatory model
◦ Purchase decision
◦ Post-purchase evaluation
◦ Factors that Influence Consumer Behaviors
◦ Marketing research

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Consumer Decision Making
Process
Recognition of a need
Contextu
Internal
al
influence
Information search influence
s
s

Evaluation of alternatives

Influence
External Purchase decision s of the
influence
marketin
s
g mix
Post-purchase evaluation
See Ch.7 Figure 7.1 on p.190

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

 Motivation

Perception

Factors that Psychological Knowledge

Emotions

Influence Internal
Influences
Attitude

Consumer Identity and

Self-Concept

Behaviors
Psychographi
Values
c

Lifestyle

Informational

Factors that Influence

Consumer Behaviors
influence
Reference Normative
Groups influence
Comparative
influence

External Generations
Influences
Ethnic groups
Subcultures
Regional
Culture
Social
classes
Mood

Situational
Time
Influences

Environment
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Marketing Research
No single standard to tackle a problem

Useful classification – objective of research

Exploratory Descriptive Causal

Summary
Insights/Ideas Cause-Effect
Measure

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Data Typology
Observation,
interviews,
Qualitative
focus group,
Non- etc…
experimental
Quantitative Survey, etc..

Primary

Field

Experimental
Data Type
Laboratory

Internal

Secondary

External

Also see ch.6., Figure 6.2 on p.153

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Course Overview – Agenda (subject to change)

Part 1 – Marketing Planning Part 3 - Strategic Marketing 2

◦ Week 01: Marketing: an Introduction ◦ Week 07 - Positioning and Differentiation
◦ Mid-Term exam (1:30 pm ~ 3:30 pm Sunday, Feb 27)
◦ Week 02: Marketing Process
◦ Week 08 - Offering and Innovation
◦ Deadline of team registration
◦ Week 09 - Supervised Work Session
◦ Week 03: Internal and External
(mandatory)
Environments ◦ Assignment 2
◦ Week 04: Consumer Behavior
Part 4 - Tactical Operations
Part 2 - Strategic Marketing 1 ◦ Week 10 - Price and Distribution
◦ Week 05 - Segmentation and ◦ Week 11 - Relationship Selling and
Targeting Marketing Communication
◦ Week 06 - Supervised Work Session ◦ Assignment 3

(mandatory) ◦ Week 12 – Revision

◦ Assignment 1 ◦ Final exam (9 am ~12 pm Thursday, April 16)

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Today’s Objectives
Distinguish the various categories of segmentation variables

Know the factors related to targeting decisions and how to pick a segment to
target

Understand the marketing information system and its importance in the

marketing management process

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Integrated Marketing Model
Value creation
Marketing strategy
Value • Marketing strategy Value
exploration • Creativity and marketing production
innovation
Analysis Commercial mix
• Internal and • Products, service and
Marketing
external brands
• Marketing
environment • Marketing
approach
• Marketing communication
• Marketing
research • Relationship selling
process
• Consumer • Distribution
behavior • Price

Market
Analysis Strategy Decisions Action Program

01 02 03 04 05 06 07
Situation Set Resourc Segmenti Deciding Impleme Control
analysis objective e ng, on the ntation and
s allocatio targeting, marketing contingen
n positionin mix cy
g

Marketing Planning Process

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR. 19
Marketing Strategy

Positioning &
Segmentation Targeting
Differentiation

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Example: Amore Pacific Ryo

Beautiful Hair loss Damage Deep Dandruff

aging hair care line care line Cleansing relief line
loss care • For strong and • Intensive line • Dandruff relief &
• 93% Anti hair fall healthy looking nourishment and • Deep Cleansing scalp soothing
efficacy scalp and hair shine coating & Scalp effect
satisfaction, effect for purification
Clinically proven damaged hair effect for oily
hair loss care scalp
efficacy

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR. [Link]

[Link]
Segmentation
Divide the market into submarkets Segmentation
Variables
Homogeneous customers (in some Sociodemographic variables
attributes) within groups
Geographic variables
Groups different from each other
Psychographic variables

Lifestyle

Behavioral variables

Volume and profitability

Variables specific to a market

See Ch.3 Table 3.1 on p.58

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

 McDonald´s
YouTube Channel
[Link]
r/McDonaldsUS/videos

What’s the value proposed by

the commercials?

What are the segments of

customers these commercials
target?

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Sociodemographic Variables
Sociodemographic Income, age, education, net worth, gender, ethnic
variables origin, religion, language, occupation, marital
Geographic variables status, and family structure
Psychographic
variables In practice, most sociodemographic segmentation
utilizes a combination of several variables.
Lifestyle

Behavioral variables
Volume and
profitability
Variables specific to a
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Sociodemographic Variables:
Example
DINK
• Double Income, No Kids, describes one member of a couple with
above-average household income and no dependent children.

GLAM
• Greying Leisured Affluent Married. Retired older persons, asset rich
and high income.

SITCOM
• Single Income, Two Children, Oppressive Mortgage. Tend to have
very little discretionary income, struggle to make ends meet.

Tween
• Young person who is approaching puberty, aged approximately 9–12
years; too old to be considered a child, but too young to be a
teenager.
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Geographic Variables
Sociodemographic Country, region, population density (e.g. central
variables business district, urban, suburban, rural, regional),
Geographic variables city or town size, climate, physical environment,
Psychographic postal codes.
variables
e.g., Winter tire
Lifestyle

Behavioral variables
Volume and
profitability
Variables specific to a
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Geographic
Variables:
Example
Geographic variables

Geo-monitoring
◦ [Link]

Geo-targeting
◦ e.g., Marketing using postal codes
◦ [Link]
h?v=e0yZYTJuqcY&feature=e
mb_logo

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Psychographic Variables &
Lifestyle
Sociodemographic Psychographic Variables
variables ◦ Customer mindsets, values, opinions, interest,
Geographic variables attitudes towards life
Psychographic Lifestyle
variables
◦ Psychographic + Geographic + Sociodemographic
Lifestyle

Behavioral variables
Volume and
profitability
Variables specific to a
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

 Segmentation

Source: Nie, C., & Zepeda, L. A Lifestyle Segmentation Study of US Food Shoppers to Examine Organic and Local Food Consumption.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Behavioral Variables
Sociodemographic Purchasing behavior
variables
Geographic variables
Benefits sought

Psychographic (shampoo example)

variables
Usage rate
Lifestyle
(heavy/ light users)
Behavioral variables
Volume and Customer loyalty
profitability
Variables specific to a User status (beginner/ experienced)
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Behavioral Variables:
Example of Grocery Shopping
Primary Natural
Protein Heart Weight
Grocery Channel
Seekers Managers Managers
Shoppers Shoppers
• Completely • Manage • Manage • Consumers • Shopped
agree that heart weight for who do all or natural food
they seek disease, health most of the supermarket
foods high in high blood reasons or grocery , General
protein pressure, for shopping for Nutrition
high appearance their Center,
cholesterol household health and
natural food
store, or
other
nutrition
store in past
3 months

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Volume and Profitability
Sociodemographic Pareto Principle: 80% of the results come from 20%
variables of the causes.
Geographic variables ◦ 20% customers contribute to 80% of total revenue.
Psychographic ◦ Customer profitability
variables ◦ Customer lifetime value
Lifestyle
e.g., VIP service
Behavioral variables
Volume and
profitability
Variables specific to a
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Variables Specific to a Market
Sociodemographic Critical to a certain market, hard to generalize
variables
Geographic variables
e.g.,

Psychographic
variables
Lifestyle

Behavioral variables
Volume and Decorating and
profitability House owner vs
renovation Age of House
tenant
Variables specific to a market
market

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

In-Class Exercise:
Advertising and Segments
We are going to divide the class into 8 teams and give each one a segmentation
variable.

You have 15 minutes to find a commercial on YouTube that is a good

representation of your segmentation variable

Do not use the same videos/channels that I used in class

Send me the link of commercial your team picked

Prepare a short explanation (1-minutes presentation) of the commercial you

selected to share, and the elements of your variable found within

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Combination of Variables:
Segmentation Grid
e.g., A pork chop restaurant in Montreal

Who are the potential customers? How can

you divide them into different segments
according to their primary needs?

How does each segment compare across

various segmentation categories (e.g.,
geography, demographics, psychographics,
behavioral) ?

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

 A Pork Chop Restaurant in
Montreal
Segment Geograph
Primary Need Demographics Psychographics Behavioral
Name y
Trendy Terry  25-35 years old  Does not want to
Unique and  Disposable be confused as a  Goes out to
trendy dinner Downtown income student restaurants 1-2
experiences  Single and/or No  Enjoys quite/casual times a week
Kids outings
Marc the  Values quality over  Goes out to
Meat  30-45 years old quantity restaurants 1-2
Connoisseur Obscure and  willing to spend times a month
 High Income
s unique Suburban  more money at a and experiments
Educated
variety  Respectable Job restaurant with different
 Likes knowing food options at
obscure knowledge home
Meat  Values quantity  Loyal to
Hungry  17-25 years old
 over quality restaurants/bars
Monster School Low income  Likes spending time
Meat volume  they like
Ghetto Lots of friends  Eats out 3-5
 with friends and
Student
going out in groups times a week
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Segmentation: Business Market
Economic variables Company size, financial soundness and growth

Geographic
variables Region, country and type of physical environment
Organizational
culture, Purchasing process, types of relationships desired
procurement policy
Behavioral variables Needs, expectations, situations and usage

Volume and
profitability Purchase volume

Market Types of companies or industries

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Make a Segmentation Grid of
HEC Montréal
In teams of 4-5 people, discuss and identify at least 3 segments of customers

Also, name each segment (e.g., “book geeks”)

Describe each segment using at least 3 segmentation variables (e.g.,

geography, demographics, psychographics, behavioral)

Prepare a short presentation with a table (1-minutes presentation) of each

segment as in “A Pork Chop Restaurant in Montreal”

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

To Make Your
Segmentation
Work
To maximize usefulness
of your segmentation,
◦ Measurability
◦ Size
◦ Accessibility
◦ Homogenous within the
segment and
heterogeneous between
the segment

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Does Segmentation Always
Work?

When a product is innovative, segmentation can be too

early

Too sophisticated segmentation can undermine your

firm’s profit

If you are a challenger, it can be better to do counter-

segmentation

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

How Facebook Tracks Your H T T P S : / / W W W. YO U T U B E .

Data | NYT
C O M / WATC H ? V = J A O _ 3 E V
D 3 DY

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Targeting
Select segments, markets or customers that a
business wants to compete and win over.

Why targeting?

In the pork chop case, can you describe the

dishes/ the price/ the restaurant renovation when
targeting each segment?

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN

"AIDEN" LEE, DR.
Factors for Targeting
Size

Adaption
Growth
cost
Profitabili
ty

Competiti
Accessibil
ve
ity
situation

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Types of Targeting Strategies
Mass Marketing

• The same thing for everyone.

Segment Marketing

• Adapting the marketing mix to meet the various needs of different groups.

Niche Marketing

• A single marketing mix for a very small and specific segment.

Personalized Marketing

• Adapting the marketing mix to each customer on their own.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

 Snapchat's
Bitmoji
Stories
[Link]
tch?v=Qld8miBDJrY

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN"

LEE, DR.
MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
LUSH
Lush Cosmetics: Freedom of
Movement, Freedom for All
◦ [Link]
watch?v=xN6ooAtY1Vg

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Apple iPhone
13 Pro
Introducing iPhone 13 Pro
◦ [Link]
watch?v=XKfgdkcIUxw

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.
Marketing Research
No single standard to tackle a problem

Useful classification – objective of research

Exploratory Descriptive Causal

Summary
Insights/Ideas Cause-Effect
Measure

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Data Typology
Observation,
interviews,
Qualitative
focus group,
Non- etc…
experimental
Quantitative Survey, etc..

Primary

Field

Experimental
Data Type
Laboratory

Internal

Secondary

External

Also see ch.6., Figure 6.2 on p.153

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Primary Data vs. Secondary Data
PRIMARY DATA SECONDARY DATA

· Collected by you · Collected by a third party

· For your research purpose (specific) · For other purpose

Advantages & disadvantages

• Quality of data
• Usefulness of problem
solving
• Cost of obtaining the data

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Case Study: Picolo Vélo
In teams of 5-6 students, read the Picolo Vélo case study and answer the following
questions:

1. Why do you think Picolo Vélo has only been able to sell five bikes in the past
three years, based on the information provided in the article? What do you think
the brand should change immediately to reach its sales objective for next year?

2. Suggest a new segment for Picolo Vélo to target. Identify the reason for that
target, then use at least two segmentation variables to pare down the segment to
its final definition.

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

What We Covered Today
• Segmentation and Targeting
• Marketing Information System

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.

Next Time
S u p e r v i s e d Wo r k
S e s s i o n b y m e a n d TA

Please prepare your

team assignment

MARK 10100A-INTRODUCTION TO MARKETING BY HYUNHWAN "AIDEN" LEE, DR.