Explain the importance of market identification. Objectives: Discuss ways that a market can be segmented.
Explain the importance of market identification.
A Market Is … A customer who: Marketers look carefully at which customers want their needs met in the very near future. Has an unfulfilled desire Is financially able to satisfy that desire Is willing to satisfy that desire Has an unfulfilled desire Is financially able to satisfy that desire Is willing to satisfy that desire
Marketers group customers by target market in order to meet customer needs effectively. Customers who have similar, specific needs A Target Market Is … The particular group of customers the business seeks to attract
How To Pinpoint a Target Market Look at the entire market. Identify the categories you see. Select the category (or categories) to fit your goals.
The Significance of Target Marketing Targeting is necessary for accurate marketing. The same person can be included in more than one target market. As target markets change over time, marketers update their categories. Customers are targeted in the consumer market. Businesses are targeted in the industrial market.
Mass marketing Segment marketing Target- Market Activities
Mass Marketing Is … Appealing to the whole market by: Designing products Directing marketing activities
Communicate a broad message Address the largest audience available Produce one product for all Provide the most possibilities for success—without breaking the bank Advantages of Mass Marketing
Diversity of the audience—everyone Probability of purchase is a small percentage Disadvantages of Mass Marketing
Segment Marketing Is … Appealing to the market one segment at a time by: Dividing the market into smaller groups Targeting each group individually
Advantages of Segment Marketing Advantages of Segment Marketing Segment marketing works because: It uses the marketing concept. It is more precise than mass marketing. It allows for: A finely tuned product An appropriate price Ease of distribution
Advantages of Segment Marketing In addition, segment marketing: Encourages effective communication Allows product specialization Enables smaller businesses to compete with larger ones.
Disadvantages of Segment Marketing It takes more resources to pull it off successfully. It can be difficult to produce— requiring more Creativity Money
The Use of Segment Marketing Because… Customers are more discerning. Marketing research has improved. Modern technology is available. It is more efficient than mass marketing.
Demographic Segmentation Gender Origin or heritage Religion Social or economic status Life stage
Geographic Segmentation Where their markets are located Who their competitors are Which media will reach their customers In the process, marketers discover specifically: Dividing a market on the basis of where consumers are located
Find out how consumers respond Use that information to group them effectively With this method, marketers: Dividing a market on the basis of consumers’ response to a product Behavioral Segmentation
Customers want what they feel will give them the best in life. Marketers group customers by their similarities—according to their motives, attitudes, opinions, interests, activities, personalities, and lifestyles. Psychographic Segmentation Dividing a market on the basis of consumers’ lifestyles and personalities How it works: Marketers try to find out what’s driving their customers to make the choices they do.
What do you think marketers would do to target you? If marketers were grouping you, where would you fit in the demographic, geographic, behavioral, and psychographic segments? How are you similar to, or different from, your family members and friends? How do you think your similarities and differences affect your purchase decisions?
Sometimes, when businesses identify (and target) their markets, their methods raise eyebrows. Credit-card companies are one example. Credit-card companies give credit to college students who don’t yet have a full-time job. Credit-card companies offer colleges money in return for helping them distribute credit-card applications to students. Should credit-card companies use this method to target college students?