1 Part 3 Marketplace Dynamics Chapter 16 Segmenting a Market.
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Transcript of 1 Part 3 Marketplace Dynamics Chapter 16 Segmenting a Market.
1
Part 3 Marketplace DynamicsChapter 16
Segmenting a Market
2
Chapter Objectives
Explain how segmentation helps a marketer determine a market to target.
List the four categories of segmentation variables for the consumer market.
Explain each segmentation category and give one example.
Describe how marketers use more than one segmentation variable.
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Segmentation variable customer characteristic used to segment
a market
Market Segmentation
Adult
Teen
Child
Baby
Senior
Age Income
Medium
Low
High
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Market Segmentation
Segmentation variables are organized into four categories geographic demographic psychographic behavioral
What customer characteristics come to mind when you consider these categories?
5
Geographic Variables
Geographic segmentation dividing a market based on where
customers live
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Location
Location not climate geography of place customs of place
Example: car manufacturer For the United Kingdom market,
steering wheel on the right For the United States market,
steering wheel on the left
U.S.A.
U.K.
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Climate
Climate different climates
require different types of products, such as– clothing– automobile tires– housing– heating and air
conditioning
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City Size
Market size often varies with city size for some products,
a small city might not have a large enough market to generate enough profitLarge
Medium
Small
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City Size
Example: some restaurant chains will open only in cities of 200,000 or more people
Conversely, some products are very successful in small markets
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Demographic Variables
Census count of the people in a country made by
the government on a regular basis– the U.S. government takes a census
every ten years Demographic information
statistics (numbers) that describe the characteristics of a population– collected in a census
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Demographic Variables
Demographic variables are used to segment large markets into smaller markets that might be good target markets
Demographic segmentation the process of segmenting a market
based on demographic variables
Choose a demographic variable. How would you use it to segment a market?
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Age
Generation group of people who were born or grew up
during a particular period of history People in the same generation generally
have similar attitudes, wants, and needs The U.S. consumer market is often
segmented by generations
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In which generation do you belong?your parents?
Age
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Gender
Markets are often segmented into products for men or women
Name some products that were developed to meet the specific needs of men or women.
©2007 JupiterImages Corporation
15
Ethnicity
Needs for many products vary with ethnic or cultural heritage examples
– ingredients for making ethnic foods
– items for religious practices
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Income
Marketers are interested in two categories of income disposable income
– money left after taxes are taken out discretionary income
– money left after taxes are taken out and after necessities are paid for
A market is often segmented based on income levels
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Family Size
Families of different sizes have different needs
Describe the differences in purchases between a single person and a large family.
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PsychographicVariables
Psychographic segmentation based on psychological characteristics of
customers
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Hobbies and Activities
People who participate in the same hobbies and activities often buy similar things examples of hobbies and activities
– photography– quilting– stamp collecting– sports– cultural events
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Behavioral Variables
Behavioral segmentation dividing a market based on the way
customers use a product Behavioral variables include
features desired usage rate brand loyalty
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Features Desired
Customers vary in the features they want some just want the
basics others want advanced
or extra features
©2007 JupiterImages Corporation
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Usage Rate
80/20 rule most of the profits (80%) come from a few
customers (20%) who show the greatest brand loyalty
Marketers often segment the market based on customer usage rates heavy, moderate, light, nonuse
How could you use the difference in usage rate to segment a market?
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Market Segment Profile
Market segment profile a detailed description of the typical
customer in a market segment Includes information on
geographic variables demographics psychographics behavior relevant to the product