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Part 3 Marketplace Dynamics

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Presentation on theme: "Part 3 Marketplace Dynamics"— Presentation transcript:

1 Part 3 Marketplace Dynamics
Chapter 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.

3 Market Segmentation Segmentation variable
customer characteristic used to segment a market Age Income

4 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

6 Location Location Example: car manufacturer 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

7 Climate Climate different climates require different types of products, such as clothing automobile tires housing heating and air conditioning

8 City Size Market size often varies with city size
Ch. 16, Segmenting a Market 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 profit Small Medium Large

9 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

10 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

11 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?

12 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

13 In which generation do you belong? your parents?
Age In which generation do you belong? your parents?

14 Gender Markets are often segmented into products for men or women
©2007 JupiterImages Corporation Name some products that were developed to meet the specific needs of men or women.

15 Ethnicity Needs for many products vary with ethnic or cultural heritage examples ingredients for making ethnic foods items for religious practices

16 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

17 Family Size Families of different sizes have different needs
Describe the differences in purchases between a single person and a large family.

18 Psychographic Variables
Psychographic segmentation based on psychological characteristics of customers

19 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

20 Behavioral Variables Behavioral segmentation
dividing a market based on the way customers use a product Behavioral variables include features desired usage rate brand loyalty

21 Features Desired Customers vary in the features they want
some just want the basics others want advanced or extra features ©2007 JupiterImages Corporation

22 How could you use the difference in usage rate to segment a market?
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?

23 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

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