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

2. 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

3. 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

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

5. 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

6. 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’

7. 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.

8. 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

9. 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

10. 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

11. 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.

12. Target Markets Undifferentiated Marketing Differentiated Marketing
Niche Marketing

13. 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

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

15. 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

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

17. 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

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