mkt 450: market segmentation presentation for sperry top sider report 10 30 09

Brad Herndon Catherine Glynn Jorge Galindez Luke Schenkel

Overview

• Market Situation Analysis

• Consumer Market Segmentation

• Lifestyle (Psychographics) Segmentation

• Benefit Segmentation

• Consumer Decision Process

Market Situation Analysis

Brad Herndon

Footwear Industry

• Includes about 100 manufacturers; 1,500 wholesalers; 30,000 retail outlets

• Total revenue of $25 billion

• Manufacturing overseas

• Highly competitive, constant change to meet fashion demands

Sperry Top-Sider

• Founded in 1935 by Paul Sperry

• Inspired by his dog, Prince, and his ability to gain traction on wet surfaces

• Developed a “boat shoe”

Sponsorships

• Sperry Top-Sider is partners with various organizations

• Teams, competitions, and non-profits

Collective Brands, Inc.

• Subsidiary brand of Stride Rite Corporation

– Owned by Collective Brands since 2007

• In 1979, Stride Rite Corporation purchased Sperry Top-Sider for $5.7 million

Direct Competitors

Indirect Competitors

Sperry Top-Sider Shoes

• Nautical Casuals

• Gold Cup Collection

• Adventure/Performance

• Weather Gear

• Sandals

Annual Industry Sales

Industry Market Share

Table 2: 2008 Industry Market Shares12, 13

Company Market Share in %

Nike 12.00

Adidas AG 9.00

Jones Apparel Group, Inc. 3.00

Collective Brands, Inc. 2.80*

Sketchers USA, Inc. 2.50

The Timberland Company 1.50

Wolverine World Wide, Inc. 1.30*

* Indicates Estimate

Industry Market Share

Industry Market Share Zoom View

Company Sales: Collective Brands, Inc.

* Sperry was not a subsidiary during these years

Table 3: 2008 Collective Brands, Inc. Yearly Sales14

Year Sales ($ Millions)2000* 2,785.32001* 2744.72002* 2736.12003* 2662.42004* 2656.52005* 2665.72006* 2796.72007 3035.42008 3442.0

Company Sales: Collective Brands, Inc.

Current Newsworthy Items

• Renewal of partnership with U.S. Sailing team

• 75th anniversary

– Expansion

Consumer Market Segmentation and

Lifestyle Segmentation

Jorge Galindez

• Country Club Carla and Colin

• College Chris and Katie

• Competitive Sailors Simon and Sarah

• Retired Rick and Rachel

• Young Professionals Pete and Patricia

Country Club Carla and Colin

Country Club Carla and Colin• Work: Professional career in business, medicine, law, or

architecture

• Social Events: Country club events, dinner parties, office parties

• Club Membership: Country Club, yacht clubs, books, card clubs

• Family: High Family values, very family oriented

• Products: Like high quality products regardless of cost

• Vacation: Sailing destinations, Europe, Caribbean, California

• Age: 30-55

College Chris and Katie

College Chris and Katie

• Work: Full-time student; work, internships, co-ops• Social Events: Parties, bars, sporting events• Club Membership: Fraternities and sororities, other on-

campus club, gym membership• Family: Close with family but usually just see them on school

breaks• Products: Concerned with quality and style but have a tight

budget• Vacation: Spring break skiing or at a party beach location,

study abroad, road trips• Age:18-22

Competitive Sailors Simon and Sarah

Competitive Sailors Simon and Sarah

• Work: Sailing instructors, jobs when they have free time; teachers, professors

• Social Events: Spending time at the yacht club, post competition events

• Club Membership: Yacht club, sailing clubs, gym membership

• Family: family oriented but spend a lot of time away, just married or single

• Products: Very brand loyal to top performing products like outdoor gear, want quality

• Vacation: Sailing along the coast to different climates, going to islands

• Age:18-45

Retired Rick and Rachel

Retired Rick and Rachel• Work: Recently retired professionals• Social Events: Getting together with friends and family for

dinner parties, going to plays and orchestra concerts, card clubs, sailing outings

• Club Membership: Country club, bridge club, rotary club• Family: Very family oriented, enjoy traveling to visit kids and

grandkids• Products: Very brand loyal, more concerned about comfort

than style• Vacation: Travel all around the U.S. and Europe, prefer

warmer climates• Age: 60 and over

Young Professionals Pete and Patricia

Young Professionals Pete and Patricia

• Work: Young professional

• Social Events: Movies, concerts, parties, dinner parties, going out to bars, sporting events, alumni functions

• Club Membership: Country club, gym memberships

• Family: Live on their own, but still close to family

• Products: Enjoy brand names

• Vacation: Trip with old college or high school friends, weekend road trips

• Age: 23-35

VALS 2™ NETWORK LIFESTYLE (PSYCHOGRAPHIC) SEGMENTATION

LegendCountry Club Carla and ColinCollege Chris and KatieRetired Rick and RachelCompetitive Sailors Simon and SarahYoung Professionals Pete and Patricia

HIGH RESOURCESACTUALIZERSSelf-Confident.

Enjoy the "finer things."Receptive to new

products and technologies.Skeptical of advertising.

Frequent readers of a wide variety of publications.

PRINCIPLE ORIENTEDFULFILLEDS

Value knowledge.Little interest in

image or prestige.Like educational and

public affairs programming.Read widely and often

BELIEVERSTraditional.

Family oriented.Buy American.

Slow to change habits.Look for bargains.Watch TV more

than average.

STATUS ORIENTEDACHIEVERS

Image-conscious.Relatively affluent.

Attracted to premiumproducts.

Average TV watchers. 

STRIVERSImage-conscious.

Limited discretionary incomes,but carry credit balances.

Spend on clothing andpersonal-care products.Prefer TV to reading.

ACTION ORIENTEDEXPERIENCERS

Action-oriented.Follow fashion and fads.

Spend much of disposable income on socializing.

Buy on impulse.Listen to rock music.

MAKERSSelf-sufficient, hands on.

Shop for comfort,durability, value.

Unimpressed by luxuries.Read auto,

home mechanics,fishing magazines.

STRUGGLERSRestricted consumption.Concerned with securityand safety. Brand loyal.

Trust advertising.Watch TV often.

LOW RESOURCES

PRIZM CLUSTER PROFILES(Potential Rating Index by Zip Market) Claritas Partners, L.P.

High Resources Low Resources

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Blue Blood Estates

God’s CountryThe

CosmopolitansSimple

PleasuresYoung and

Rustic

Winners CircleSuburban

SprawlMiddleburgManagers

Domestic Duos Mobility Blues

Urban Gold Coast

Mayberry-villeTraditional

TimesClose-in Couples

Crossroads Villagers

Country Squires Young DigeratiYoung

InfluentialsBlues Family Thrifts

Money and Brains

Bohemian Mix Greenbelt Sport Heartlanders Bedrock

Upper Crust Upward Bound Up-and-ComersShotguns and

PickupsBig City Blues

Big Fish,Small Pond

Beltway Boomers

Urban Achievers

Suburban Pioneers

Low-Rise Living

Movers andShakers

Kids &Cul-de-Sacs

Boomtown Singles

Multi-Culti Mosaic

Golden Ponds

EliteFast-TrackFamilies

New Homesteaders

Old Glories Old Milltowns

Executive SuitesAmerican Dreams

Big Sky Families

American Classics

Back Country Folks

Brite Lites,Little City

New Empty Nests

White Picket Fences

Red, White & Blues

Urban Elders

Home SweetHome

Pools & Patios Blue-Chip Blues New BeginningsPark Bench

Seniors

Gray PowerKid Country,

USABlue Beginnings City Roots

City StartupsHometown

Retired

Legend

Country Club Carla and Colin

College Chris and KatieRetired Rick and Rachel

Competitive Sailors Simon and Sarah

Young Professionals Pete and Patricia

PRIZM CLUSTER LIFESTAGE GROUPS & SOCIAL GROUPS

SEGMENTNAME

BLUE BLOOD ESTATES

Country Club Colin and Carla

YOUNG INFLUENTIALSCollege Chris and

Katie

GRAY POWERRetired Rick and

Rachel

LifestageGroup

Accumulated Wealth Young Achievers Conservative Classics

SocialGroup

Elite Suburbs Middleburbs Middleburbs

DemographicDescription

Wealthy Middle Age Families

Midscale Younger Singles

Midscale Mature Singles/Couples

Urbanicityand Tenure

Suburban Homeowners

Suburban Renters Suburban Homeowners

PredominantAge(s)

35-64 <35 65+

Employment ProfessionalProfessional, White

CollarProfessional, White

CollarEducation College Graduate + High School/College High School/College

Race/Ethnicity White, High Asian White, High Asian Mostly White

Preferences

Took a golf vacationEat at fast food picked by kids

Fortune MagazineMajor League Soccer

Acura SUV

Buy high-end computers

GQ MagazineThat 70's Show TV

Mazda Protégé

Go to museumsOwn a vacation/weekend

homeWheel of Fortune TV

Mercury Sable

PRIZM CLUSTER LIFESTAGE GROUPS & SOCIAL GROUPS (Continued)

SEGMENTNAME

GREENBELT SPORTCompetitive Sailors

Simon and Sarah

UP –AND-COMERSYoung Professionals

Pete and Patricia

LifestageGroup

Young Achievers Young Achievers

SocialGroup

Country Comfort City Centers

DemographicDescription

Midscale Middle Age Mix

Midscale Younger Mix

Urbanicityand Tenure

Town/Rural Homeowners Second City Renters

PredominantAge(s)

25-54 <35

EmploymentWhite & Blue Collar,

FarmingProfessional, White

CollarEducation High School/College High School/College

Race/Ethnicity Mostly White White, Asian

Preferences

Go mountain bikingBuy self-help books

Self MagazineSubaru Forester

Use internet for job search

Shop at Ann TaylorMitsubishi Eclipse

Benefit Segmentation

Catherine Glynn

PRODUCT POSITIONING MAPPerformance Boat Shoes

PRODUCT POSITIONING MAPStylish Casual Shoes

BENEFITS OFFERED BY BRAND

BRANDStyle Quality/

DurabilityPerformance/

Non SlipBrand

RecognitionComfort

2 3 2 2 2

3 4 3 3 3

5 4 5

5 5 1

4 4 1 4

1 2 5

1 1

MARKETSEGMENT

Style Quality/ Durability

Performance/ Non Slip

Brand Recognition

Comfort

Country Club Carla and

Colin

1 3 5 2 4

College Chris and Katie

2 4 5 1 3

Retired Rick and Rachel

4 2 5 3 1

Competitive Sailors Simon

and Sarah5 2 1 4 3

Young Professionals

Pete and Patricia

2 3 5 1 4

BENEFITS SOUGHT BY MARKET SEGMENT

TARGET MARKET DISCOVERY GRIDBENEFITS SOUGHT BY TARGET MARKET

BRANDand

TARGETMARKET

Style Quality/ Durability

Performance/ Non Slip

Brand Recognition

Comfort

2 3 2 2 2

Target MarketCountry Club

Carla and Colin

2 3 5 1 4

High quality sailing shoe that is durable and stylish from a well-known

brand

Comfortable shoe that I can wear out on my boat and out on

the town

Quality shoes from a

recognizable brand that I trust

The shoe allows me to be

confident in my appearance

whether I am out on my boat or out on the

town

THE BENEFIT CHAINWOMEN’S AND MEN’S CASUAL AND PERFORMANCE

SHOESCountry Club Carla and Colin

THE PRODUCT

FUNCTIONAL BENEFIT

PRACTICALBENEFIT

EMOTIONALPAYOFF

BENEFIT SEGMENTATION

MARKET SEGMENT OVERLAPWOMEN’S AND MEN’S CASUAL AND PERFORMANCE

SHOES

Retired Rick and Rachel

37%

Country Club Carla and

Colin

24%

Young Professionals Pete

and Patricia

19%College Chris and Katie

17%

Competitive Sailors Simon and Sarah

3%

MARKET SIZE AND SALES POTENTIAL

Total Market (ages 18 – 74): 207,337,573 peopleSize of each market segment for casual and performance shoes:

Country Club Carla and Colin 24%College Chris and Katie 17%Retired Rick and Rachel 37%Competitive Sailors Simon and Sarah 3%Young Professionals Pete and Patricia 19%

TOTAL 100%

Users: 80% = 39,808,814 .0017 Sperry Top-Sider market share (.17%)x 39,808,814 User Totalx 1 Number of pairs per yearx $90 Price per pair of shoes $6,090,749 Dollar sales per year

Total: $6,090,749 Total sales potential for target market “Country Club Carla and Colin”

Target Market: Country Club Carla and Colin = 49,761,017

Consumer Decision Process Model

Luke Schenkel

Consumer Problem: Exposure

• Problem

– Country Club Carla and Colin are not being exposed to company sponsored advertising

• Evidence

–Word-of-mouth is most common form of exposure

– Advertising is very limited

– Advertisements rarely appear in magazines that Country Club Carla and Colin favor

Consumer Problem: Comprehension

• Problem

– Country Club Carla and Colin do not fully understand the performance benefits offered by the Sperry Top-Sider brand

• Evidence

– Rarely exposed to advertisements

– Purchase mostly for style not performance

Marketing Mix Solution: Exposure

• Potential Solutions

1. Advertise in publications that Country Club Carla and Colin favor

2. Make sure Sperry footwear is sold where Country Club Carla and Colin shop most often

3. Sponsor non-aquatic sporting events

Marketing Mix Solution: Comprehension

• Potential Solutions

1. Focus advertisements around the “Sperry Story”

2. Pay for retailers to provide education and incentives to sales representatives

3. Include “Sperry Story” with purchases

Strategic Opportunity Matrix

PRESENTPRODUCT

NEWPRODUCT

PRESENTMARKET

Market Penetration StrategyMarketing research

Product differentiationGain market share

Lowest risk“Product Positioning”

Product Development StrategyMarketing research

Product developmentProduct differentiation

Medium risk“Flanker Brand”

NEWMARKET

Market Development StrategyMarketing research

Market segmentationProduct differentiation

Heavy promotionMedium risk

“Market Segmentation”

Diversification StrategyMarketing research

Market segmentationProduct differentiation

Mergers, acquisitions, joint venturesHighest risk

“Diversification”

Conclusion

• Market Situation Analysis

• Consumer Market Segmentation

• Lifestyle (Psychographics) Segmentation

• Benefit Segmentation

• Consumer Decision Process