 The term “Market” has been defined in many

ways, all depending on whose point of view is

referred to.
 Writers define “market” almost similarly. They
differ only on which point each would want to
emphasize. For instance, the place is stressed
with the definition “market is a place where
sellers and buyers exchange goods (or services)
upon an agreed price.”
 Another definitions of market emphasizes the
buyers with “market as a group of people or
organizations that buy a particular good,
service or concept.”
 Another definition of market stressed
opportunity with the statement “market is any
mechanism that enables buyers and sellers to
strike bargains and to transact.”
 A very useful definition is this one: “a market
is composed of people with needs to satisfy,
the money to spend, and the willingness to
spend.”
Markets may be classified acc. to: (1) type of
institution; and (2) form.
There are three types of markets acc. To type of
institution; (1) Consumer markets; (2)
organizational markets; and (3) international
markets.

Consumer markets
 Buyers who intend to directly consume a
product or service constitute the consumer
market.
Organizational markets
 Constitutes buyers of products or services
whose intention is to produce another
product or service.

International markets
 This refers to all types of buyers found
abroad including consumers and
organizations.
Markets may also be classified according to form. These are: (1) the
primary; and (2) the secondary markets.

Primary markets
 This is the type of market that is formed when a firm introduces
a new product class in response to latent demand of needs.

Secondary markets
 This type is an offshoot of the primary market and it is formed
when customers develop specific needs or preference.
 A market segment is a sub-group of a
particular market which composed of units
with more or less similar characteristics. people
may have similar wants, financial resources,
geographic locations, buying attitudes, and
buying patterns. These variables may be used
individually to segment a market.
Market segmentation offers the following advantages to
the marketer:
1. Segmentation forces the marketer to be aware of
realities in the market.
2. Segmentation provides clues in the design of products
and marketing programs that will reach the
prospective customers.
3. Segmentation can help identify opportunities for new
product development.
4. Segmentation can help improve the strategic
allocation of marketing resources.
Concentration or single-segment strategy
 Refers to the long term decisions of the
company to deal only with a particular
segment of market.
Multi-segment strategy
 Calls for providing product or services to two
or more segments of the target market.
Segment number Need dimensions Customer-related Nickname of product-
(benefit sought) characteristics market

Travel convenience; Young(18-21 yrs old) The fun lover

1 Distinctive ownership -unmarried, active, fun-
of asset loving

Steady source of Older and more The bread winner

2 income; economy
Travel convenience; Job
3 security
Source of additional
4 income
mature(21-50 yrs old)
-low income and less
education
Older and more mature The salaried employee
(21-40 yrs old)
-income salary and
higher education
Retired (50 yrs old and The retiree
above)
-income from pernsion
Geographic segmentation
 Requires dividing the market into different geographical units like
nations, regions, provinces, cities, towns, or barangays.
Demographic segmentation
 Refers to dividing the market into segments on the basis of
demographic variables like age, sex, family size, family life cycle,
income, occupation, education, religion, race and nationality.
Psychographic segmentation
 Refers to the classification of buyers or consumers by some
psychological characteristics they possess in common.
Behavior segmentation
 Is a term that refers to the grouping of buyers
on the basis of their knowledge, attitude, use,
or response to a product.
Buyer behavior may be segmented acc. To various
categories, namely: (1) purchase occasion; (2)
benefit sought; (3) user status; (4) usage rate;
(5)loyalty status; (6) readiness usage; and (7)
attitude toward product.
Buyers may also be group according to their loyalty to
particular brands. They may be classified as follows:
1. Those who buy only one brand of a product
2. Those who buy two or more brands
3. Those who shift from one brand to another
4. Those who have no brand preference

Another way of segmenting the market is to classify

buyers acc. To their readiness to buy.
1. People who are unaware of the product
2. People who are aware of the product
3. People who are inform of the product
4. People who are interested in the product
5. People who desires the product
6. People who want to buy the product
People`s attitude toward the product may also be
classified acc. To their degree of enthusiasm.
1. People who have an enthusiastic attitude
toward the product
2. People who have a positive attitude toward the
product
3. People who have an indifferent attitude toward
the product
4. People who have a negative attitude toward the
product
5. People who have a hostile attitude toward the
product
To be useful and effective, market segmentation
must meet the following requirements:
1. It must be measurable

2. It must be substantial

3. It must be accessible

4. It must be actionable
Measurable
 The variables of a particular segment must be
measurable. For instance, if a segment is define
as men who are college graduates and
currently employed, it would be relatively easy
to find information about number of such men
in the population.
Substantial
 The segment must be large or wide enough to
be economically feasible.
Accessible
 Segmentation will be useful only if the segment
members can be reached economically by a
pre-designed marketing effort.

Actionable
 For segmentation to be useful, the firm must
the ability to serve the various segments.