IBM 301 Lecture Notes - Lecture 8: Marketing Mix, Millennials, Identifiability
22 views5 pages
20 Mar 2019
School
Department
Course
Professor
Chapter 8:Segmenting, Targeting, and Positioning Markets
Characteristics of a Market
● All markets share several characteristics:
○ They are composed of people or organizations
○ These people or organizations have wants and needs that can be satisfied by
particular product categories
○ They have the ability to buy the products they seek
○ They are willing to exchange their resources, usually money or credit, for desired
products
● A group of people that lacks any one of these characteristics is NOT a market
Market Segmentation
● Market: people or organizations with needs or wants and the ability and willingness to
buy
● Market segment: a subgroup of people or organizations sharing one or more
characteristics that cause them to have similar product needs
● Market segmentation: the process of dividing a market into meaningful, relatively
similar, identifiable segments or groups
The Importance of Market Segmentation
● Markets have a variety of product needs and preferences
● Marketers can better define customer needs
● Decision makers can define objectives and allocate resources more accurately
Criteria for Segmentation
● Sustainability - segment must be large enough to warrant a special marketing mix
● Identifiability and Measurability - segments must be identifiable and their size
measurable
● Accessibility - members of targeted segments must be reachable with marketing mix
● Responsiveness - unless segment responds to a marketing mix differently, no separate
treatment is needed
Bases for Segmentation
● Geography
○ Region of the country or world
○ Market _____
○ Market _____
● Demographics
○ Age
■ Marketers can segment markets by age using cohorts:
● Tweens
● Teens
● Generation Y
● Generation X
● Baby Boomers
● The War Generation
● The Great Depression Generation
○ Gender
■ Women make 85 percent of consumers goods purchases annually
■ Marketers of products such as clothing and cosmetics still segment
markets by gender, and many of these marketers are going after the less-
traditional male market
○ Income
■ Income level influences consumers’ wants and determines their buying
power
■ Retailers can appeal to:
● Low-income
● High-income
● Both
○ Ethnic background
■ The three largest ethnic groups in the United States are:
● Hispanic Americans
● African Americans
● Asian Americans
■ To meet the needs and wants of expanding ethnic populations, some
companies make products geared toward specific ethnic groups
○ Family life cycle
● Psychographics
○ Market segmentation on the basis of personality, motives, lifestyles, and
geodemographics
● Benefits Sought
○ The process of grouping customers into market segments according to the benefits
they seek from the product
● Usage Rate
○ Usage-rate segmentation: dividing a market by the amount of product bought or
consumed
○ 80 / 20 principle: a principle holding that 20 percent of all customers generate 80
percent of the demand
Benefits of Regional Segmentation
● New ways to generate sales in sluggish and competitive markets
● Scanner data allow assessment of best selling brands in region
● Regional brands appeal to local preferences
● Quicker reaction to competition
Personality and Motive Segmentation