Segmentation Targeting Notes

As Marketing Manager, before you can identify the meaningful segmentation variables, you need to know a little more about the Sauber washer-dryer. The All-in-One washer-dryer combo does it all in one machine without taking up a lot of space. Just place the dirty laundry in the front-loading machine and when you return, it's washed and dried. Even more impressive is its ability to clean; whites were 20% cleaner with 15% fewer stains as compared to competing models. The machine measures just 22" across and 34" high, which is 10% smaller than competing models. However, this means it holds a smaller load by U.S. standards. And unlike traditional dryers, the All-in-One does not require outside exhaust venting. Sauber's washer-dryer is available in four stylish finishes: stainless steel, pearl white, gunite gray, and obsidian. Although the cycle time is 20% longer than average, the machine runs quietly and offers 10 wash, 5 spin, and 8 dry options. A programmable timer allows users to program a wash up to 23 hours in advance. The manufacturer's suggested retail price is $1499, which is more expensive than U.S. brands' washer-dryer combinations, which average around $1000. Choose the two variables that would be most predictive of purchase intent for the All-in-One washer-dryer. Household size: how many people? Dwelling type: apartment, condo, or house? Religious orientation: beliefs and worship 5 out of 5 points earned: You chose household size. That was one of the best choices. Smaller households would benefit most from the washer-dryer combo due to the smaller-than-average load size. You chose dwelling type. That was one of the best choices. Not only is dwelling type often correlated with household size, but also apartment dwellers would benefit from the ventless dryer feature. LO 7.2 List and discuss the major bases for segmenting consumer and business markets. Now that you have your primary segmentation variables identified, what should your next step be? Identify the market segments to target. Design a marketing campaign. Identify an overall positioning strategy. 5 out of 5 points earned: You chose to identify the market segments to target. That was the best choice because you need to identify your target market before you can position your product or create a marketing campaign. Explain how companies identify attractive market segments and choose a market-targeting strategy. With the segmentation variables identified, the VP of Marketing asks you to think about what the target market would look like for the Sauber washer-dryer combo. The VP continues: "I need you to analyze three key demographic segmentation variables and make recommendations for each. As you make your recommendations, keep the washer-dryer's key attributes in mind. We'll begin with household size." Small households: 1-2 members Large households: 5+ members Medium households: 3-4 members 5 out of 5 points earned: You chose to target small households. That was the best choice. Small households generate the smallest amount of laundry, which would be compatible with the small load capacity of the Sauber machine. Now you need to think about the dwelling type that your target consumers are most likely to live in. As you make your selection, keep the following descriptions in mind: The average American house is 2600 square feet, with 85% having washer and dryer hookups. The average American apartment is 940 square feet, with 67% having washer and dryer hookups. The average American condominium is 1750 square feet, with 91% having washer and dryer hookups. Condominium Apartment House 5 out of 5 points earned: You chose apartment as the dwelling type. That was the best choice. Apartments are the smallest of the three dwelling types, making space valuable. Additionally, many apartments lack dryer venting, which makes the Sauber's All-in-One even more attractive. LO 7.3 Explain how companies identify attractive market segments and choose a market-targeting strategy. The last segmentation variable you need to consider is income. You could target consumers with high incomes (greater than $100,000) or medium incomes (between $40,000 and $99,999). Sauber eliminated consumers with incomes less than $40,000 from consideration because not enough of these consumers have the ability to purchase their own laundry machines. Medium income High income 5 out of 5 points earned: You chose high income. That was the best choice because the Sauber All-in-One washer-dryer costs 50% more than the market average. LO 7.3 Explain how companies identify attractive market segments and choose a market-targeting strategy. Consumer lifestyles are also an important factor in market segmentation and targeting. Review the following three consumer lifestyles and identify the one that would find the greatest value in the All-in-One washer-dryer. Social butterfly: With large social circles and lots of activities, these consumers are always on the go. Typically young, these consumers move from work, to the gym, to a night on the town nearly every night. A quick change of clothes is all they need to keep the party going. Work-a-holic: With a high-pressure job and the CEO's office in sight, it's not uncommon for these consumers to pull 80+ hour work weeks. Approaching their mid-30s, these consumers recognize that their professional aspirations have taken a toll on their social life, but for now they're content with the sleep-work-sleep routine. Homebody: With a comfortable career and income, these consumers know what makes them happy: reading, listening to music, and spending time at home with their pets and close friends. Work-a-holic Homebody Social butterfly 5 out of 5 points earned: You chose to target the social butterfly lifestyle. That was the best choice. Social butterflies live a busy lifestyle, which leaves little time for laundry. Additionally, social butterflies are rarely home to do laundry. Saving time with an All-in-One machine would be attractive to this segment. Everyone at Sauber is now in agreement that consumers who are time-pressed are the best target market for the All-in-One washer-dryer. Therefore, the target market for the washer-dryer combo is a busy, small-household, high-income consumer who lives in an apartment. In order to promote the All-in-One washer-dryer to this target, you need to decide how to distinguish it from its competitors. What is a good number of key product differences to promote? There may be more than one good choice here. Three Two One 5 out of 5 points earned: You chose to promote two key differences to distinguish the Sauber washer-dryer from its competitors. That was one of the best choices. Many marketers recommend positioning a product on more than one attribute to clearly distinguish from competing products. You are focusing on two product attributes when promoting the Sauber washer-dryer. Given what you know about the Sauber washer-dryer combo, which product attributes do you want to promote to your target market? Cycle time and cleaning power Cycle time and convenience Cleaning power and convenience 5 out of 5 points earned: You chose to promote cleaning power and convenience. That was the best choice. The Sauber washer-dryer cleaned whites and stains 20% better than the competition, which is a meaningful difference even though competitive washer-dryers have similar levels of convenience. Keeping the target market and competition in mind, what is the best way to position the Sauder washer-dryer in the marketplace? Laundry appliance consumers seek a number of attributes from the product. Fortunately, you just received data from a recent consumer survey identifying cleaning ability, price, and machine size as the three most important attributes to consumers. Select a positioning statement that you feel captures Sauber's differential advantage most accurately. Sauber All-In-One: Small machine, small price. Sauber All-In-One: Cleanest clothes, small machine. Sauber All-In-One: Cleanest clothes, high price. 5 out of 5 points earned: You chose "Cleanest clothes, small machine." That was the best choice. Sauber machines clean clothes better than the competition, and the machine is smaller than the competition's. Both of these attributes are highly valued by the target audience. DEMOGRAPHIC Life cycle: Louis and Theresa have a full house of kids living at home ages 15, 12, and 10. Occupation: Tyrese is an engineer who works full time for a government contractor. PSYCHOGRAPHIC Social Class: Ellie has a Harvard MBA, a $500,000 salary, a trust fund, and a high-power career, which places her in the upper upper class. Personality: Phil is outgoing. gregarious, and always up for an adventure. BEHAVIORAL Usage Rate: Erin loves lattes and visits her local coffee shop on a daily basis to get her fix. Occasion: George only buys his wife flowers once a year. She gets a dozen red roses every Valentine's Day. Which perceptual map best represents your positioning strategy? Cleaning level High Machine Size Large Small Low 5 out of 5 points earned: This was the best choice. Your perceptual map correctly places Sauber's All-in-One in the high cleaning level, small size quadrant, which is in line with your positioning.