TARGET MARKET AND MARKET SEGMENTATION

TARGET MARKET ANDMARKET SEGMENTATIONMarketing Foundations – Target D

TARGET MARKETThe group of customers whose

needs and wants you will try to satisfy◦Examples….teens, babies, business

people, college students

Target Market should have:Clearly defined wants and needs

that your company can meetMoney to buy your productWillingness and authority to buy

your productEnough customers n the market

to be profitable

Target Market + Marketing Mix

Marketing Strategy

*Remember, the Marketing Mix is all the decisions you make about the 4 P’s.

Mass MarketingThe development of only one

marketing mix for a specific product

Assumes that everyone has exactly the same wants and needs for the product

Target marketing approachHas marketers analyze the mass

marketThen, segment (divide up) the

market based on the different needs and wants of the customers in that market

The company will choose one segment to develop a marketing mix (the 4 P’s) that will meet the unique wants and needs of that market segment

Market SegmentationMarketers segment (divide up)

possible markets by:◦Demographics◦Geographics◦Psychographics◦Product benefits

Demographic SegmentationStatistics that describe the

characteristics of a population of people◦Age◦Gender◦Ethnicity◦Family size◦Income

Disposable – money left after taxes Discretionary – money left after taxes and

necessities taken out (what you have left to spend)

Psychographic Segmentationbased on psychological

characteristics that affect needs and wants◦Hobbies◦Social activities◦Lifestyle◦Interests◦AttitudesIf you show the target market in ads, people see themselves and relate better to the promotional message

Geographic SegmentationBased on where customers live

◦Location◦Climate◦City size

Product Benefitsbased on the perceived value or

advantage consumers receive from a good or service over alternatives. ◦Quality◦Performance◦Image◦Service◦Special features

Combining VariablesMarketers find it useful to target

a market based on two or more segments◦Geographic + demographic (city + income)

Example: marketers of luxury products can get zip codes of people with the highest income levels.