Presentation on theme: "Understanding the World of Marketing Market Segmentation."— Presentation transcript:
Understanding the World of Marketing Market Segmentation
Analyzing Markets ► Market segmentation is a way of analyzing a market by specific characteristics in order to create a target market ► Market Segmentation: Separating larger groups into smaller groups based on certain characteristics
Target Market The specific group of people to whom you are trying to sell your products or services. A target market is a set of individuals who share common characteristics.
Types of Segmentation: Demographics Psychographics Geographics Behavioral
Demographics – Statistics & facts that describe a population in terms of personal characteristics. Age Gender Income Marital Status Ethnic Background Occupation Education, etc…
U.S. Demographic Trend The percentage of the Caucasian population is declining, while other ethnic populations increase.
Psychographics Involves grouping people with similar lifestyles, as well as shared attitudes, values, and opinions. Activities Attitudes Personality & Values
Geographics Segmentation based on where people live
Behavioral Looking at the benefits desired by consumers (status), shopping patterns, and usage rate. Market benefits…not just the physical characteristics of a product
Behavioral Segmentation Many businesses find that the 80/20 rule applies. 80% of a company’s sales are generated by 20% of its loyal customers.
Mass Marketing VS. Segmentation Mass Marketing Using a single market strategy to reach all customers…not as popular as it once was Niche Marketing (the current trend) Markets are narrowed down and defined with extreme precision
Niche Marketing Idea is to advertise and market products to a specific target market..... (narrow demographics) This is often used by small companies as it is a way of avoiding competition who may not be interested in such a small segment
Niche Marketing Examples: Gardening magazines Nascar Montessori schools MTV focuses on youth Lifetime television focuses on women
Mass Marketing Mass marketing strategies aim the strategy at the whole market This is generally used by larger companies whose products appeal to everyone
Mass Marketing Examples: Tide detergent TV magazines HP all in one Printer/fax/copy/scanner (American Idol, Olympics, Super bowl)
Mass Marketing To Reach the Largest amount of people possible. Focus on high sales and low prices Products for everyone Less risky Marketing research costs and Advertising costs relatively low.
Product Life Cycle The Product Life Cycle shows the life of a product from its conception to its death There are five stages in the product life cycle: 1. Research and development the product is being developed, high costs 2. Introduction – product is introduced to the market sales are low profit is negative as research and development costs are being met
Product Life Cycle 3. Growth – Sales increase rapidly, firm starts to make a profit 4. Maturity – Sales reach their peak, profits start to decline as competition increases 5. Decline – Sales fall, profits begin to fall, the product might be taken off the market