Presentation on theme: "Part 3 Marketplace Dynamics"— Presentation transcript:
1 Part 3 Marketplace Dynamics Chapter 16Segmenting a Market
2 Chapter ObjectivesExplain 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 marketAgeIncome
4 Market SegmentationSegmentation variables are organized into four categoriesgeographicdemographicpsychographicbehavioralWhat 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 placecustoms of placeExample: car manufacturerFor the United Kingdom market, steering wheel on the rightFor the United States market, steering wheel on the left
7 ClimateClimatedifferent climates require different types of products, such asclothingautomobile tireshousingheating and air conditioning
8 City Size Market size often varies with city size Ch. 16, Segmenting a MarketCity SizeMarket size often varies with city sizefor some products, a small city might not have a large enough market to generate enough profitSmallMediumLarge
9 City SizeExample: some restaurant chains will open only in cities of 200,000 or more peopleConversely, some products are very successful in small markets
10 Demographic Variables Censuscount of the people in a country made by the government on a regular basisthe U.S. government takes a census every ten yearsDemographic informationstatistics (numbers) that describe the characteristics of a populationcollected in a census
11 Demographic Variables Demographic variables are used to segment large markets into smaller markets that might be good target marketsDemographic segmentationthe process of segmenting a market based on demographic variablesChoose a demographic variable. How would you use it to segment a market?
12 AgeGenerationgroup of people who were born or grew up during a particular period of historyPeople in the same generation generally have similar attitudes, wants, and needsThe U.S. consumer market is often segmented by generations
13 In which generation do you belong? your parents? AgeIn which generation do you belong? your parents?
15 EthnicityNeeds for many products vary with ethnic or cultural heritageexamplesingredients for making ethnic foodsitems for religious practices
16 Income Marketers are interested in two categories of income disposable incomemoney left after taxes are taken outdiscretionary incomemoney left after taxes are taken out and after necessities are paid forA 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 segmentationbased on psychological characteristics of customers
19 Hobbies and Activities People who participate in the same hobbies and activities often buy similar thingsexamples of hobbies and activitiesphotographyquiltingstamp collectingsportscultural events
20 Behavioral Variables Behavioral segmentation dividing a market based on the way customers use a productBehavioral variables includefeatures desiredusage ratebrand loyalty
22 How could you use the difference in usage rate to segment a market? 80/20 rulemost of the profits (80%) come from a few customers (20%) who show the greatest brand loyaltyMarketers often segment the market based on customer usage ratesheavy, moderate, light, nonuseHow 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 segmentIncludes information ongeographic variablesdemographicspsychographicsbehavior relevant to the product