Market Identification Project #2: Marketing Plan Analysis
What is a Market? Definition – a customer or potential customer who: has an unfulfilled desire (needs a good or service), is financially able to satisfy that desire (has the resources to purchase the good or service), and is willing to satisfy that desire (is willing to purchase the good or service to meet a need)
What is a Target Market? A particular group of customers that a business seeks to attract; the customers who fall into a particular target market share similar needs and characteristics Women over the age of 50 Teens between the ages of Mothers of newborns Men between the ages of 40-55
Importance of Target Markets Businesses identify target markets in order to make products that will effectively meet the needs of the targeted customers
Mass Marketing Mass marketing is designing products and directing marketing activities to appeal to the whole market, which is everyone Advantages: Can be used to communicate a broad message to as many customers as possible Allows a business to produce one product for everyone, which is more cost-effective than producing and marketing several products to several target markets Provides the most possibilities for success at the least cost Disadvantages: Audience is very diverse Only small percentage of that mass market is likely to purchase the product
Market Segmentation Uses the division of a total market into smaller, more specific groups; the needs and concerns of each market segment can be met more directly and carefully Advantages: More precise than mass marketing Allows for a finely tuned product, an appropriate price, and ease of distribution for the targeted market segment Encourages effective communication because its message is targeted to a specific market segment Disadvantages: Requires more money Targeted at a more specific group of people with more specific needs and expectations, the product is often more complex to produce
Use of Segment Marketing Today’s customers are more discerning with product purchases; they are more educated and less swayed by mass marketing They want to know how the good or service will benefit them directly Marketers are turning to segment marketing to address those concerns
Ways to Segment Markets D________________ Segmentation G________________ Segmentation B________________ Segmentation P________________ Segmentation
Demographic Segmentation Involves dividing a market on the basis of it physical and social characteristics: Gender Origin or heritage Religion Social or economic status Life stage
Geographic Segmentation The division of a market on the basis of where consumers are located – grouping customers based on where they live Allows marketers to determine customers’ purchase preferences according to things like their climate, their political boundaries, or the population density of their area Helps marketers discover where their markets are located, who their competitors are and which media will reach their customers
Behavioral Segmentation Division of a market on the basis of consumers’ response to a product Marketers look into the cause-and-effect nature of customers’ purchase decisions What do customers respond to when they buy a certain product? Useful because it lines up with the marketing concept, which uses the customer’s point of view to make marketing decisions Customers typically ask themselves one or more of the following questions when buying a particular product: How will the product benefit me? Am I ready to buy it? When will I use the product? Am I in a comfortable buying pattern? Do I feel loyal to a particular brand?
Psychographic Segmentation The division of a market on the basis of consumers’ lifestyles and personalities Helps marketers find out what’s driving their customers to make the choices they do Customers’ buying decisions are influenced by their: Values Motives Attitudes Opinions Interests Activities Personalities Lifestyles What motivates YOU???