Target Markets and Market Segmentation Who is buying

Target Markets and Market Segmentation Who is buying our stuff and why? Gregory Falls THS, GSWLA

Target Market A specific group of customers on whom an organization focuses its marketing efforts It is the group you are trying to attract; the focus of your marketing efforts; your main customer group. Where you get most of your money!

Market Segment A group of customers with certain characteristics in common, whose needs or wants can be met with a specific marketing mix. Remember the 4 P’s? Market Segmentation, or Target Marketing, is identifying a group based on certain characteristics and then designing a plan to appeal to that specific group.

Market Segments MUST: Be Identifiable and Measurable: can you tell them apart, can you count them? Be Accessible: able to reach them through communication and distribution channels. Be Substantial: a large enough group so you can make a profit. Be Unique: different from other buying groups Be Durable: the group’s characteristics don’t change too quickly

GREAT! So, how do we do this? Simple…. just ask a few questions. Who is buying our stuff? What are they buying? Where are they buying it? Why are they buying it? THEN, Is this the group we really want to be buying our stuff?

Ways to Segment the Market Geographic: WHERE they live or shop, and the local characteristics. Demographic: Dividing the market based on Population characteristics. WHO are they? Behavioral: Dividing them based on HOW they buy. Psychographic: Categorizing based on psychological factors. WHY do they do the things they do?

Demographics What does your customer look like? Easy things like: Age Gender Race / Ethnicity Education Religion Income / Occupation Family size or life cycle

Behavioral HOW they Buy: Heavy or light usage Price sensitivity Brand loyalty Benefits Sought from the product Occasion User status: first time buyer, repeat user

Psychographic No, not THAT kind of psycho…you don’t have to be crazy to buy the product! Dude, it’s all about the lifestyle, man. Activities Interests Opinions Values Attitudes

Got it, Now what? STP time Segments: Define them. Target: Pick the most appropriate for your product. Position: Remember the 4 P’s? …go back through them for each product you sell or segment you are targeting.

Need more? Resources: http: //www. sba. gov/ http: //www. score. org/ http: //www. netmba. com/ http: //www. quickmba. com/ Gregory. Falls@VBSchools. com