Marketing Segmentation Unit 1 Chapter 2 Market Segmentation
- Slides: 15
Marketing Segmentation Unit 1, Chapter 2
Market Segmentation • Dividing the total market into smaller groups of people who share specific needs and characteristics • Remember a “market” is: – People who share similar needs and wants and are capable of buying products
You Decide Explain which groups of people the following products are most suitable for: • Sports & exercise goods • Luxury sports cars • Animated films • Lipstick
Segment Jeans Market • Who buys jeans? – Classify people who form this market: – By age: kids, teens, adults – By price: marketers try to reach different income levels (also called socio-economic group) – By desired features: tight fit, comfortable fit, newest fashion, unique design, etc. • Levi’s makes: relaxed fit, regular fit, 501 original, loose straight, boot cut, low rise straight, and low rise boot cut
Ways to Segment Population • The four factors that help segment a market and describe a target market are: ØDemographics ØGeographics ØPsychographics ØBehavioral factors
Demographics • Demographics refer to statistics that describe a population in terms of personal characteristics such as: Ø Age Ø Gender Ø Income Ø Marital status Ø Family size Ø Family Life cycle Ø Education Ø Occupation
Analyzing a Market • When calculating how much products should cost, marketers look at two types of income measurement: • disposable income - Money left after subtracting taxes • discretionary income - Money left after subtracting costs for basic living necessities. • Marketers who sell necessities such as food and clothing are concerned with disposable income, while those who sell luxury products pay attention to discretionary income.
Geographics • The term geographics refers to segmentation of the market based on where people live. To segment a market geographically, you can refer to: Ø Local markets Ø Regional markets Ø National markets Ø Global markets • Also, consider: Ø Population density (urban, suburban, rural) Ø Climate (tropical, temperate, cold)
Psychographics • Psychographics involves grouping people with similar: Ø Lifestyles Ø Attitudes Ø Values Ø Opinions Ø Activities Ø Interests • This may be based on: culture, religion, race, social class
Behavioral • Separating the market based on product-related behavior involves looking at the: Ø Benefits desired by consumers – (convenience, economy, prestige) Ø Shopping patterns – do they already purchase it? Where would they use it? Ø Usage rate – light medium, heavy; have they ever purchased it?
Behavioral Continued • By studying consumer behavior, many businesses find that 80 percent of a company’s sales are generated by 20 percent of its customers. • This phenomenon is known as the “ 80/20" rule.
Mass Marketing vs Segmentation • Mass marketed – When a product has universal appeal and few features to differentiate them, it is marketed to everyone – Examples: milk, toothpaste, computers • Most companies market to a “niche” – which means to a particular segment of people
Be Prepared to Stand if you believe you belong to the segment that the following different products are aimed at. • i. Pods • Toms • Laptop • Bowling • Cosmopolitan magazine • Android phone • Mountain bike • Local cinema
Math Practice • IF 93 percent of the US population of 290, 890, 777 snacks at least once a day, how large is the market for snack food? – 270, 528, 432 • The 80/20 Rule: Here are sales figures for 10 customers. (1) $75, 000, (2) $700, 000, (3) $815, 000, (4) $70, 000, (5) $60, 000, (6) $30, 000, (7) $25, 000, (8) $53, 750, (9) $40, 000, (10) $25, 000 • Explain the 80/20 rule using the above figures – Total = 1, 893, 750 – so the two customers above #2 and #3 have 80% of the sales but constitute 20% of the customers!
Assignment • We are going to be using market segmentation to create a person who is representative of a target market. • Find handouts: – “Target Market person Activity” – “Figure 5. 2 Useful Segmentation Bases” • Divide into teams of 2 – 3 • Need poster board, Internet (or magazines), markers
- Market segmentation lesson
- Marketing segmentation targeting positioning
- Market leader challenger follower nicher
- Unit 6 review questions
- Geographic segmentation of cadbury
- Market segmentation analysis template
- Kfc segmentation targeting positioning
- Segmentation bases
- Nivea positioning statement
- What are the requisites of sound market segmentation
- Pringles brand positioning
- Bases of market segmentation
- Health insurance market segmentation
- Market segmentation geographic demographic psychographic
- Psychographic segmentation of nivea
- Fine-grained screening