SEGMENTATION Market Segmentation Competency Focus Creativity learners will

SEGMENTATION

Market Segmentation

Competency Focus Creativity: learners will develop skills in creativity and design by firstly looking at how promotion is used in business to help them to reach their goals and secondly, to design their own promotional campaign responding to a creative brief from the client. Reasoning: Learners will develop skills in reasoning as after providing advantages and disadvantages for the use of the promotional mix, you will be required to make a reasoned judgment. [IB Learner Profile Development : Reflector]

Success Criteria I can… 1) Describe what is meant by market segmentation 2) Explain the benefits of market segmentation to a business in marketing its products. 3) Analyse the differences between B 2 B and B 2 C segmentation.

KEY TERMS Business-to-Business (B 2 B): When one business sells a product to another business. Business-to-customer (B 2 C): When a business sells products to consumers. Purchasing Decision: Series of choices a consumer will make before buying a product. Demography: Study of the population and how this changes over time.

LO 1) What is Market Segmentation? “Breaking down a market into sub-groups with similar characteristics” (Hall et al, 2008, p. 29) Imagine an orange. . .

PROCESS: MARKET RESEARCH (To find out who is interested in buying your product) MARKET SEGMENTATION (Break down market into sub-groups) TARGETING

2) Benefits of Market Segmentation Task: In your groups, write down all the benefits of segmenting the marketing into sub -groups for a business. Think about what type of learner you are when working in a group situation!

What type of learner are you? Autonomous You are highly motivated during lessons. You research deep into the subject using a variety of sources, and use your researched information to explain and analyse the underlying meanings and morals of myths and legends. You are a natural group leader, who helps and has a positive and successful effect on your group tasks. You have a determination to succeed, and always identify areas to improve, as well as suggesting ways to do this. Advanced You have a positive attitude and motivation during lessons. You research into the subject using more than one source, and use this information to take out key points about the meanings and morals of myths and legends. You volunteer to take on roles within your group, and help other students with their work. You are eager to improve, and use your WWW and EBI’s to do this. Strong You enjoy lessons and show a positive attitude and motivation. You research using more than one source, and can pick out the main points about myths and legends. You volunteer to take on roles within your group, and can help other students with their work. You are eager to improve, and can identify both strengths within your learning, as well as areas that you could work on. Regular You are motivated to achieve in your lessons. You tend to research using a preferred way of finding information, but can pick up some main points about myths and legends. You may need guidance when taking on roles within your group, and sometimes need support on how to apply research to learning. Guided With guidance, you can understand how motivation can help you to achieve in your lessons. With support, you can make decisions about how important your researched information is. You need guidance from your group leaders when taking on roles within your group, and benefit from support on how to apply research to learning.

B 2 C Types of market segmentation: - Graphically (where they live/ use of ACORN/MOSAIC models) - Demographically (gender/age/social class/income) - Psychographically (lifestyle/personality) - Behaviourally (how they act i. e. Impulse buyers/seek luxury) Lead learners to research ACORN/MOSAIC models

B 2 B Decision-making unit (DMU): All the staff that participate in the purchasing decision making process in a business i. e. Managing Directors, Purchasing Director/Suppliers etc How are businesses segmented? - Size & value - Region - Public/private/voluntary sectors - Product/Industry

GROUP TASK Each group is given a copy of Alton Towers case study. Pupils work in groups to present responses to the following questions: • • Who are the customers targeted by AT? How can these customers be classified? Do you think there any B 2 B customers of AT? These are the figures for 2010, do you think this will remain the same for 2012. If not how will it change and why?

TASK: WRITING FRAME Your Info Sheet must include the following: ü Brief intro on the company (state what products you are focusing on) ü What is market segmentation? (own definition) ü Benefits of market segmentation for a business ü Explanation of key terms including B 2 B, B 2 C, DMU etc ü Explanation of types of market segmentation for B 2 B and B 2 C marketing

WRITING FRAME • Choose six different customer groups that are targeted by the organisation for selected products (no minimum!). These should include both B 2 B and B 2 C customers. For each group explain: • a) how the groups of customers are targeted for selected products • b) why the groups of customers are targeted for selected products.

MODEL ANSWER Your display board should look something like this…

Example… Toni & Guy Hairdressing Services Haircare Products - Professionals (B 2 C) - Age (18 -45 yrs) - Luxury (B 2 C) - Salons (B 2 B) - By age (22 -45 yrs) (B 2 C) - Retail i. e Boots (B 2 B)

Plenary Porsche Car Direct Line Home Insurance City-living new apartments Cadbury’s chocolate bar Popcorn New ride at Alton Towers Deodorant