1. Think… Think of all the ways a marketer might describe YOU as a consumer. Begin with your age, then get more specific about your shopping requirements and trends.

2. objectives TLW explain the concept of market segmentation TLW analyze a target market

3. Market Segmentation Remember?

4. Market Segmentation The process of classifying people (who form a given market) into smaller groups. Example: cell phone users Example: Nike consumers

5. CARS, for example… segments What are some of the segments of the automobile industry?

6. Price Price: different income levels Age Age: teens, young adults, mature adults Desired features Desired features: Desired use Desired use: CARS, for example…

7. Once you have your segments… Which to target?? Can’t do all – too expensive BUT, your company needs choose a market (to target) in which they have a sustainable competitive advantage.

8. Data Marketers have different outlets to find the data they need about their markets or potential markets: Government Private research firms Trade associations Their own research Companies have got to figure out if the markets are large enough to be profitable to pursue.

9. Data If you were a jeans manufacturer, you might want to know if there are enough teens to justify making jeans for them Research would show: buying behavior ethnic background interestsvalues household income levels activities fashion opinions

10. segmentation Customers can be segmented into groups based on 4 different categories of factors: 1. demographics 2. geographics 3. psychographics 4. behavioral characteristics

11. 1. demographics Refer to statistics that describe a population in terms – Age – Gender – Income – Marital status – Ethnic background – Education – Occupation

12. For instance…. Regarding age, – Baby Boomers (46-64)- $ going up with age, so they are targeted! (technological gadgets, cosmetics, lifestyle products…) – Generation X- (kids of late Boomers)(“Baby Bust”)- children of working parents or divorced parents; always had media all around; pay attention to purchases, skeptical; marketers must use intriguing images, music, humor – Generation Y- (Millennium Generation)- racially and ethnically diverse WITH spending power; internet based information

13. Regarding GENDER… A lot of the same products marketed a little differently… Women Men

14. Regarding income… Marketers have got to know HOW MUCH people have to spend. – Disposable – Disposable income- after taxes; necessary products – Discretionary – Discretionary income- what’s left AFTER basics are bought; luxury and premium products

15. Marital status…. Think of cereal for a family of five…. Now, it might be a family of one or two. HOW does the marketing target those two markets?

16. Ethnic background The U.S. is becoming so much more diverse (think Johnson & Johnson and Hispanic mothers)… Caucasian population is decreasing relative to Black, Hispanic, and Asian populations. HOW DOES THIS CHANGE MARKETING??

17. demographics Zipskinny Tennessee Then three to compare

18. 2. Geographics Based on where consumers live – Local- local business – State- political campaigns – Regional – regional banks, food, drinks, snow plows – National, global- per continent/country