THE MARKETING ENVIRONMENT Main influences on the marketing environment Political Economic Social Technological Competitive Environment

Categorising Consumers It is important to recognise that the marketing function will categorise their customers as they recognise that different people are influenced in different ways Businesses will use a variety of means of categorising or segmenting their market

Methods of Categorising Consumers/ Segmenting the Market Age Gender Income Religion Ethnic Grouping Social Class Geography/Location Market Segmentation is the term used to describe the ways in which business divide their markets into broad categories

The way the Marketing Function examines the market will influence its decision on Pricing Product development Placing Promotional strategies

Benefits of Segmenting the Market Provides consumers with the exact product they want Specific groups of consumers can be targeted with appropriate products A range of differentiated products to meet their needs 4Ps will be balanced to reflect demands eg suitable price, appropriate channel of distribution

Benefits of Segmenting the Market continued In tune with their group of consumers which allows them to respond to changes in their needs more effectively Specialisation may be encouraged The firm may identify a gap in the market and develop a product to ‘fill the gap’

How does the Categorisation of Consumers affect Buying and Selling? Segmenting the market will allow business to take advantage of any opportunities and prepare for any threats.

Age If you have an ageing population you will provide more goods for older people Gender If the population is unbalanced and there are more eg females this will influence business Income The amount of money available to spend (disposable income) is extremely important to the marketing function of business

Religion Some religions demand specialised goods eg Kosher foods Ethnic Grouping Some ethnic groups have demands for different types of products Eg specialist hair gels for Afro-Caribbean groups

Social Class Consumers are often split into 6 socio-economic divisions: A = upper or middle B = middle C1= lower middle C2 = skilled worker D = working E = subsistence These classifications are often used not to reflect income levels but buying habits

Geography/Location Different geographical areas have different needs and wants eg those in rural areas spend more of their income on travel … Income The changes in the make-up of households has significantly altered buying habits.

Target Markets Undifferentiated Marketing Differentiated Marketing Niche Marketing

Undifferentiated Marketing Is where the product appeals to most consumers there is no need to target particular segments of the market The product/service is sold to the entire market As a result they do not spend much money on advertising Benefit from high volume sales and economies of scale

Eg Milk – it appeals to all ages, genders, income levels

Differentiated Marketing Is where businesses offer a range of products to different groups within the market The product is altered to suit the consumers Differentiated marketing makes use of market segmentation to adapt the product, price etc to suit the consumers they are targeting

Example Kellogg’s – sell a range of cereals that are aimed at different segments of the market

Niche Marketing Is where a business makes use of market segmentation to target a very small specialist market. The Niche market is one that takes advantage of the areas that big business has ignored – they are targeting a gap in the market Eg cookery holidays

Problems of Niche Marketing Possible threat of competition as the bigger competitors realise there is a business opportunity Changing tastes of the consumer