Market Segmentation

Market Segmentation November 11, 2010

Previously… • Definition of Marketing • Purpose of Marketing • Marketing Concept • 7 Functions of Marketing • Channel Management • Financing • Marketing Information Management • Pricing • Product / Service Management • Promotion • Selling

Marketing Info Management • Includes marketing research • You can’t sell your product if you don’t know who your customers are! • Marketing research is used for market segmentation, the process of classifying customers in a market into smaller groups.

Stand Up! • Push in your chair. • Line up in the middle of the classroom, from the front to the back. Order does not matter. • Listen for instructions 

Move to the BACK of the room if… Move to the FRONT of the room if… You consider yourself to have more traditional tastes. You know what you like, and you stick with it. You consider yourself to have trendier tastes. You like change, and you look for a fun or modern appeal.

Move to the RIGHT side of the room if… Move to the LEFT side of the room if… You are a health-conscious eater. You prefer to eat what tastes good.

Marketing Cereal Brands Healthy Tasty Traditional Trendy

Back to Center! • Line up in the middle of the classroom, from the front to the back. Order does not matter. • Listen for instructions 

Move to the BACK of the room if… Move to the FRONT of the room if… You prefer the busy, fast pace life of the city. You prefer the calm, laid back pace of the country.

Move to the RIGHT side of the room if… Move to the LEFT side of the room if… You prefer warm weather. You prefer cold weather.

Marketing Vacation Trips Warm Cold City Country

Market Segmentation • Classification of customers by wants and needs • Creates smaller, more precise target markets

What is a Target Market? • Group of people identified as the most likely to become customers • These are the people a business wants to reach with their goods or services!

Segmentation Factors

Demographic Definition Examples Refers to statistics that describe a population in terms of personal characteristics • Age • Gender • Income • Marital Status • Ethnic Background • Education • Occupation

Geographic Definition Examples Based on where people live • Local • Regional • National • Global

Psychographic Definition Examples • Grouping people with similar lifestyles • Grouping people with shared attitudes, values, opinions • Activities • Attitudes • Personality • Values

Behavioral Definition Examples • Involves looking at the benefits desired by consumers, at shopping patterns, and at usage rates • Sometimes referred to as Product Benefit segmentation • Teenagers spend about $50 a month on entertainment. • Teenage girls spend 15% more on music than teenage boys. • Today’s young adults desire affordable luxuries.

See What You Know! • On your handout, decide if each item is: • Demographic • Geographic • Psychographic • Behavioral • Label each with a D, G, P, or B.

Let’s Talk About It! • Where have you seen or completed a survey like this before? • How can marketers use this information? • How else can businesses collect this kind of information from customers?

Customer Profiles • Market segmentation characteristics help to create customer profiles. • A customer profile is a list of information or common characteristics about a target market.

Profile Project! You will use a profile to identify products potentially targeted to your customer.

Summary • Market Segmentation • Target Market • Segmentation Factors • Customer Profiles

Market Segmentation