Market Segmentation Section 2.2 p.37 - 41
Jan 01, 2016
Market SegmentationSection 2.2
p.37 - 41
Market Segmentation Market Segmentation is the process of
identifying a target market by dividing the market into segments according to customer needs and characteristics. Basically you take a target market and break
down into even smaller markets. This process is done so that marketers can sell
their products or services more effectively.
Market Segmentation Facts Very costly to target all groups Must find the group of consumers who you have a
clear competitive advantage Use research to determine if the costs of
development are effective Specific information allows you to know your
customers: Buying Behavior, Values, Fashion Interests, etc…
Market Segmentation How does market segmentation get accomplished?
Demographics Geographic Variables Psychographic Variables Buying Behavior
Demographics Demographics: Refers to statistics that describe a
population in terms of personal characteristics. Age (Baby Boom, Generation X, Generation Y, Generation Z) Gender (Male v. Female) Income
Disposable: Money left after taxes Discretionary: Money left after taxes & basic needs have been paid
Marital Status (Married couples with kids represent 25% of U.S.)
Ethnic Background Education Occupation
Geographics Geographics: Refers to segmenting
customers based on where they live. Segment a market geographically can be
done: Locally, Regionally, Nationally, or Globally
Hispanic cultures are prevalent in L.A., Miami, New York, Texas, Arizona, etc..
African American cultures are prominent in the south
Psychographics Psychographics involves grouping people with
similar lifestyles, as well as shared attitudes, values, & opinions.
Examples: Latest Diet Trends Environmental Concerns
Behavioral Buyers: Accounting for the type of shopping they prefer. Online, In-Store, Catalog Safety Issues concerning identity
Mass Marketing v. Segmentation Mass Marketing: Occurs when a products have
universal appeal and few features to differentiate them from competitors. Not as popular as it used to be because companies prefer
to cluster consumers.
Niche Marketing: Narrowing down your market and using precision to create your products
Market Segmentation
Age: Old lady jeans v. Flared, Bootleg, low rise, stretch
Price: High roller v. cost cutter Desired Features: Pockets, belt loops, faded,
washed out, style (carpenter, cargo, etc..)
Market Segmentation Example Product: Jeans
According to Forbes Magazine, Americans are willing to spend the following amount on a pair of jeans $20-$40 48% $40-$60 25% $80-$100 13% $100-$200 10% Over $200 4%
Market Segmentation Example Most Expensive Jeans
Market Segmentation Example Least Expensive Jeans
Bell Work Why does Market Segmentation exist?
What is the point of breaking down a large group of customers into a smaller, more specific group? Develop products that meet specific wants & needs
versus coming up with something you hope everyone will like.
Jean Example
Market Segmentation Assignment You must construct a market segmentation
grid based on the music industry
Age must be one of the criteria you use to segment your market In my movie example I used
13 and under (PG) 14-17 (PG-13) 18 and Over ®
Market Segmentation Assignment The other category for segmentation is of your
choosing and needs to have at least 5 criteria Gender or Group Size
Male Solo Artist Male Duo Male Group Female Sole Artist Female Group Female Duo
Genre of Music Rap, Top 40, Classical, Country, Rock, R&B, Latin, etc…
Market Segmentation Example
Market Segmentation Example
Market Music Segmentation You will need to print out a blank version &
an answer key
Your grade will be determined by how well someone in the class does on your market segmentation
Bell Work What is the difference between disposable &
discretionary income? Disposable is your income after taxes are taken
out Discretionary is the amount of money you have
left after taxes are taken out and your basic necessities are paid for
Bell Work What are two things that go into an
environmental scan? Political Socio-Culture Technology Economics