November 11, 2010

Market Segmentation

Previously…Definition of

Marketing

Purpose of Marketing

Marketing Concept

7 Functions of Marketing

1. Channel Management

2. Financing

3. Marketing Information Management

4. Pricing

5. Product / Service Management

6. Promotion

7. Selling

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.

Marketing Info Management

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 FRONT of the room if…

You consider yourself to have more traditional tastes. You know what you like, and you stick with it.

Move to the BACK of the room if…

You consider yourself to have trendier tastes. You like change, and you look for a fun or modern appeal.

Move to the LEFT side of the room if…

You are a health-conscious eater.

Move to the RIGHT side of the room if…

You prefer to eat what tastes good.

Marketing Cereal Brands

CheeriosSpecial K

Raisin BranTotal

Frosted FlakesRice KrispiesFroot LoopsMini-Wheats

KashiHoney

BunchesLife

Organic Cereals

Lucky CharmsCookie CrispCap’n Crunch

Cinnamon Toast Crunch

Healthy TastyTr

ad

itio

nal

Tren

dy

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 FRONT of the room if…

You prefer the busy, fast pace life of the city.

Move to the BACK of the room if…

You prefer the calm, laid back pace of the country.

Move to the LEFT side of the room if…

You prefer warm weather.

Move to the RIGHT side of the room if…

You prefer cold weather.

Marketing Vacation Trips

FloridaNevada

California

WashingtonNew York

Illinois

TexasCalifornia

ColoradoMaine

Warm ColdC

ity

Cou

ntr

y

Market SegmentationClassification 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!

Demographic

Geographic

Psychographic Beh

avioral

Ways to Segment a

Market

Segmentation Factors

Definition

Refers to statistics that describe a population in terms of personal characteristics

AgeGenderIncomeMarital StatusEthnic

BackgroundEducationOccupation

Demographic

Examples

Definition

Based on where people live

Local

Regional

National

Global

Geographic

Examples

Definition

Grouping people with similar lifestyles

Grouping people with shared attitudes, values, opinions

ActivitiesAttitudesPersonalityValues

Psychographic

Examples

Definition

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.

Behavioral

Examples

On your handout, decide if each item is:

oDemographic

oGeographic

oPsychographic

oBehavioral

Label each with a D, G, P, or B.

See What You Know!

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?

Let’s Talk About It!

Market segmentation characteristics help to create customer profiles.

A customer profile is a list of information or common characteristics about a target market.

Customer Profiles

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

Market Segmentation

Target Market

Segmentation Factors

Customer Profiles

Summary