Market segmentation helps marketers sell more efficiently.
HOW?
A. Identifying a target market by dividing the market into segments according to customer needs and characteristics
Characteristics about the consumer: 76 million Baby Boomers 1946- 1964 51% of wealth 40 million Generation X 1965- 1976 Conservative $ 77 million Generation Y 1977- 1997 Computerized Disposable income: $ after taxes Discretionary income: $ after paying all living costs US Population is changing: California 1 st state that Caucasians are the minority. Research indicates that there are almost 2 women to Each guy in the United States. Geographic Variables - statistics about where people live people who live in the same area have similar needs It is said that of the American population will be living in CA, TX and FL. Why do you think this would be true or false? Businesses look at 4 states for Hispanic markets: NY, TX, CA, and FL used when segmentation by age and gender is not sufficient involves family criteria focuses on attitudes and values - personalities and lifestyles Have values changed in the past 10 years? How has this influenced marketers? What are some of the value changes? Sometimes product benefits Segmenting the market by what does the product do for you. How you behave. Shoe MFGs divide the market based on the demands made on shoes Of each activity. Oily, dry, normal, dandruff, Are product benefits.
A. Costs more to differentiate packaging, promotion, etc. to more than one market B. Research and identification is costly C. Production costs increase when the product is changed to meet the needs of more than one market D. Only used when the potential sales will exceed sales from marketing to one larger group E. Risk is involved with smaller diversified markets The principles of a free enterprise system are(cont) Freedom of ownership
Competition 1. Direct competition For example: McDonalds vs. Burger King
The principles of a free enterprise system are(cont) 2. Indirect competition For example: McDonalds vs. Applebees 3. Price competition For example: Wal-Mart 4. Non-price competition For example: Nordstorm The principles of a free enterprise system are (cont) 5. Monopolies sole control over a product and the means of producing it.
Risk potential for loss or failure Profit All money left over from sales after expenses have been paid & the incentive for entrepreneurship How does competition affect buyers & sellers? Buyers
Sellers
Market share - the portion of a market controlled by a particular company or product.
Product positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization.