SEM 2 - 4.04

Select a target market appropriate for venture/product to obtain the best return on

marketing investment

Terms• Market – includes the group of all potential

customers who share common needs • Target market – group of very specific

customers that a company desires to have as consumers

• Mass marketing – single marketing plan to reach all consumers – Ex: bottled water

• Marketing segments – groups of unique individuals that share common characteristics

• Market segmentation – dividing the entire market into smaller groups that share common characteristics & to create a target market – niche market would be an example

Terms

The importance of target markets to SEM & why is it

increasing• Provides them with a

group of potential or existing customers in which to communicate– About their good or

service to match, understand & satisfy customer needs –

– Who is buying, what do they buy and why do they buy.

How Types of Customers Can be Used to Define a Market

MARKET SEGMENTATION: The division of a total market into smaller, more specific groups.

1. geographics2. demographics3. psychographics4. behavioral

Geographic Market Segmentation

• Region: by continent, country, state, city, neighborhood or street

• Size of metropolitan area: segmented according to size of population

• Population density: often classified as urban, suburban or rural

• Climate: according to weather patterns common to certain geographic regions

Demographic Market Segmentation

Age Generation

Baby-boomers (‘46 – ’64)

X (‘65 – ’76) Y (‘77 – ’93) Z (‘94 – ’04) techies

Gender Family size Family life cycle

Income Disposable &

Discretionary Occupation Education Ethnicity Nationality Religion Social Class

Psychographic Market Segmentation

Behavioral Market Segmentation• Behavior towards a product• Benefits sought by the customer• Usage Rate – how often do they

purchase?• Brand Loyalty – they expect something• User status – potential, first-time or

regular• Readiness to buy – urgency• Occasions like holidays, birthdays &

events that stimulate purchases

Niche Market

Concentrating all marketing efforts on a small but specific and well defined segment of the population

• Are a small part of the market• May attract a few competitors• Ex: Cleats for young children playing soccer

How Product Competition is Used to Define a Market

Businesses need to gather information about competitors' products and marketing activities

in order to determine their strengths and weaknesses in order to help them to determine what they need to do to be more competitive.

Profile a Target Market

Here are three steps to follow when identifying your market: 1. Identify Why A Customer Would Want To Buy Your Product/Service 2. Segment Your Overall Market 3. Research Your Market

Identify Why A Customer Would Want To Buy Your

Product/Service

When a business selects a target market, the most useful or desirable market segments to

the business arethose that are

measurable and accessible

Event marketers should consider culture when identifying target

markets for specific events. Why?

Segment Your Overall Market

A question that a business must answer when identifying a potentially profitable

target market is the market responsive to your product/service.

One aspect of identifying a segment of a sport/event target market that would want to buy

your product/service involves identifying the heavy users

Research Your Market

Sports and Entertainment marketers should identify their target markets after they have

carefully examined all available data and research about the segment

Conduct market research to obtain objective information that can be used in creating a

target-market profile of that fan/customer.

Identify potential market segments to address.

Present your profile in a visual presentation including pictures that represent your customer’s profile .

Determine who your ideal fan/customer is going to be