Marketing-Information Management LAP 9

Marketing-Information Management LAP 9

Explain the importance of market identification.Explain the importance of market identification.

Objectives:Objectives:

Discuss ways that a market can be segmented.Discuss ways that a market can be segmented.

Explain the importance of market identification.

A Market Is…

A customer who: A customer who:

Marketers look carefully at which customers want their needs met in the very near future.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.

Marketers group customers by target market in order to meet

customer needs effectively.

• Customers who have similar, specific needs

• Customers who have similar, specific needs

A Target Market Is…A Target Market Is…

• The particular group of customers the business seeks to attract

• The particular group of customers the business seeks to attract

How To Pinpoint a Target Market

Look at the entire market.

Look at the entire market.

Identify the categories you see.

Identify the categories you see.

Select the category (or categories) to fit your goals.

Select the category (or categories) to fit your goals.

The Significance of Target MarketingThe Significance of Target Marketing

Targeting is necessary for accurate marketing.

Targeting is necessary for accurate marketing.

The same person can be included in more than one target market.

The same person can be included in more than one target market.

As target markets change over time, marketers update their categories.

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• Segment marketing

Target-MarketActivities

Target-MarketActivities

Mass Marketing Is…Mass Marketing Is…

Appealing to the whole market by:

Appealing to the whole market by:

• Designing products

• Designing products

• Directing marketing activities

• 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 MarketingAdvantages of Mass Marketing

• Diversity of the audience—everyone

• Probability of purchase is a small percentage

Disadvantages of Mass MarketingDisadvantages of Mass Marketing

Segment Marketing Is…Segment Marketing Is…

Appealing to the market one segment at a time by:Appealing to the market

one segment at a time by:

• Dividing the market into smaller groups

• Dividing the market into smaller groups

• Targeting each group individually

• Targeting each group individually

Advantages of Segment MarketingAdvantages of Segment Marketing

Segment marketing works because:

Segment marketing works because:

It uses the marketing concept. It is more precise than mass marketing. It allows for:

• A finely tuned product• A finely tuned product

• An appropriate price• An appropriate price

• Ease of distribution• Ease of distribution

Advantages of Segment MarketingAdvantages of Segment Marketing

In addition, segment marketing:

In addition, segment marketing:

Encourages effective communication

Allows product specialization

Enables smaller businesses to compete with larger ones.

Disadvantages of Segment MarketingDisadvantages of Segment Marketing

It takes more resources to pull it off successfully.

It can be difficult to produce— requiring more

• Creativity• Creativity

• Money• Money

The Use of Segment MarketingThe Use of Segment Marketing

Because…Because…

Customers are more discerning.

Marketing research has improved.

Modern technology is available.

It is more efficient than mass marketing.

Discuss ways that a market can be segmented.

How do marketers divide their markets?

How do marketers divide their markets?

Identify their

customers’ similarities.

Identify their

customers’ similarities.

Group their customers

by what they have in

common.

Group their customers

by what they have in

common.

SomeCommonWays ToGroup Customers

Demographic SegmentationDemographic Segmentation

Geographic SegmentationGeographic Segmentation

Behavioral SegmentationBehavioral Segmentation

Psychographic SegmentationPsychographic Segmentation

Demographic SegmentationDemographic Segmentation

Gender

Origin or heritage

Religion

Demographic SegmentationDemographic Segmentation

Gender

Origin or heritage

Religion

Social or economic status

Life stage

Geographic SegmentationGeographic 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 SegmentationPsychographic 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?

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 are you similar to, or different from, your family members and friends?

• How do you think your similarities and differences affect your purchase decisions?

• 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.

• 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?