Market Segmentation and Targeting Determine Segmentation Variables Demographic

Market Segmentation and Targeting

Determine Segmentation Variables Demographic Variables Age Gender Race Ethnicity Education Occupation Family size Social Class Psychographic Variables Motives Lifestyle Personality attributes Geographic Variables Country Region Climate Terrain City size Urban/suburban/ rural Market density Behavioristic Variables Benefit expectations End-use Volume usage Price sensitivity

Demographic Variables Age Gender Race Ethnicity Income Education Occupation Family size Family life cycle Religion Social class

Geographic Variables Climate Terrain City size Population density Urban/rural areas Market Density Geodemographic Segmentation (e. g. by zip code or smaller) ü Micromarketing

Psychographic Variables Personality characteristics Motives Lifestyles © Used By Permission.

Behavioristic Variables Dividing a market according to some feature of consumer behavior toward a product ü Attitudes towards product ü Usage occasion ü Benefit Segmentation © Used By Permission.

Variables for Segmenting B 2 B Markets Geographic Location ü Location affects the level of product demand. Type of Organization ü Variations in firms’ characteristics leads to segmentation by type. Customer Size ü Different size companies often have different needs. Product Use ü Firms use basic inputs in ways different from one another. © Used By Permission.

Market Segment Profiles Describe the similarities among potential customers within a segment ü Demographic factors ü Geographic factors ü Benefits sought ü Lifestyle ü Brand preference ü Usage rates © Used By Permission.

Evaluate Relevant Market Segments Sales Estimates ü Target Market potential ü Forecast – expected sales by target Competitive Assessment ü Who, how many, how large, and how strong? Cost Estimates ü Cost to effectively market to the target segment

Select Specific Target Market(s) Criteria to consider when selecting a Target Market Ø Market size Ø Expected growth Ø Competitive position Ø Cost to reach segment Ø Compatibility with firm’s objectives, resources and skills Ø Forecasted sales

Important Note If ANY SINGLE element of the marketing mix changes in order to reach a specific group, you have created a new segment ü Change the product ü Change the price ü Change the place ü Change the promotion