Presentation on theme: "Part 3 Marketplace Dynamics"— Presentation transcript:
1Part 3 Marketplace Dynamics Chapter 16Segmenting a Market
2Chapter 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.
3Market Segmentation Segmentation variable customer characteristic used to segment a marketAgeIncome
4Market SegmentationSegmentation variables are organized into four categoriesgeographicdemographicpsychographicbehavioralWhat customer characteristics come to mind when you consider these categories?
5Geographic Variables Geographic segmentation dividing a market based on where customers live
6Location 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
7ClimateClimatedifferent climates require different types of products, such asclothingautomobile tireshousingheating and air conditioning
8City 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
9City SizeExample: some restaurant chains will open only in cities of 200,000 or more peopleConversely, some products are very successful in small markets
10Demographic 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
11Demographic 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?
12AgeGenerationgroup 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
13In which generation do you belong? your parents? AgeIn which generation do you belong? your parents?
15EthnicityNeeds for many products vary with ethnic or cultural heritageexamplesingredients for making ethnic foodsitems for religious practices
16Income 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
17Family Size Families of different sizes have different needs Describe the differences in purchases between a single person and a large family.
18Psychographic Variables Psychographic segmentationbased on psychological characteristics of customers
19Hobbies and Activities People who participate in the same hobbies and activities often buy similar thingsexamples of hobbies and activitiesphotographyquiltingstamp collectingsportscultural events
20Behavioral Variables Behavioral segmentation dividing a market based on the way customers use a productBehavioral variables includefeatures desiredusage ratebrand loyalty
22How 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?
23Market Segment Profile a detailed description of the typical customer in a market segmentIncludes information ongeographic variablesdemographicspsychographicsbehavior relevant to the product