Market Segementation Market Segmentation

Today’s objectives To understand market segmentation and targeting. Market Segementation Today’s objectives To understand market segmentation and targeting. To be able to evaluate the success of market segmentation for businesses.

Running a successful business involves 3Cs & 4Ps Market Segementation Running a successful business involves 3Cs & 4Ps Product Price Place Promotion Customer Company Competitor Today we are looking at the 3Cs

Customers… Knowing your customers is a vital tool in running a successful business…

Market Segmentation. Segment C Segment B Segment D Segment A

Market Segementation Market Segmentation This is where the market is broken down into smaller sub groups that share similar characteristics Age Gender Income Religion Ethnic group Level of education Geographical Social class Examples

Market Segementation Market segmentation A Higher managerial, administrative or professional B Intermediate managerial, administrative and professional C1 Supervisory, clerical, junior administrative or professional C2 Skilled manual workers D Semi and unskilled manual workers E State pensioners, widows, lowest grade workers.

Why is it important to understand ALL your customers? The benefits they want (service or extras) The amount they are able to or willing to pay Media (e.g. television, newspapers, and magazines) they see – to target your advertising at them. The quantities they buy – and what special offers catch their interest. The time and place that they buy

So which market segment customer would buy these? Market Segementation So which market segment customer would buy these? Age Gender Income Religion Ethnic group Level of education Geographical Social class To give the students a worksheet with the image on it – for them to complete…. Spanish villa 1_2 market segmentation task.ppt

Why is it important to know your customers? Market Segementation Why is it important to know your customers? Mass market Range of customers Niche Whether your product appeals to the masses, a small niche or a range of different customers…. Every business needs to MARKET its goods…..

So which of these products have a Market Segementation So which of these products have a Niche? Mass? Range of customers? Idea is to get five ‘volunteers’ and give them 2 images each – CHECK THAT THERE IS BLUTACK ON BACK OF EACH! Get students to stick the images under the correct heading on the following page… Spanish villa

Niche Mass Range of customers Market Segementation Idea is to get five ‘volunteers’ and give them 2 images each – CHECK THAT THERE IS BLUTACK ON BACK OF EACH! Get students to stick the images under the correct heading on the following page…

Niche Mass Range of customers A small group of people Market Segementation Niche A small group of people Mass To a full range of people Range of customers A few very different set of groups will be attracted to these! Idea is to get five ‘volunteers’ and give them 2 images each – CHECK THAT THERE IS BLUTACK ON BACK OF EACH! Get students to stick the images under the correct heading on the following page… Spanish villa

So Market Segmentation is a lot more than advertising! Market Segementation So Market Segmentation is a lot more than advertising! The owner The Franchisor BoD Marketing manager Financial manager MD So who decides on the marketing budget and what direction the marketing plan goes?

Marketing Objectives …… Market Segementation Marketing Objectives ……

Can anyone remember what S.M.A.R.T. stands for? Market Segementation SMART Targets Can anyone remember what S.M.A.R.T. stands for?

Market Segementation SMART Targets

Marketing objectives involve Market Segementation Marketing objectives involve Some examples But none of these are SMART!

Examples of SMART targets Market Segementation Examples of SMART targets

Demographic V Geographic Segmentation? B C D A

Demographic & geographic segmentation Demographic segmentation Dividing the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality Geographic segmentation Geographic segmentation tries to divide markets into different geographical units

Geographic Segmentation Regions: e.g. in the UK these might be England, Scotland, Wales Northern Ireland or (at a more detailed level) counties or major metropolitan areas Countries: perhaps categorised by size, development or membership of geographic region City / town size: e.g. population within ranges or above a certain level Population density: e.g. urban, suburban, rural, semi-rural

Limitations of Segmentation Lack of information and data: some markets are poorly researched with little information about what customers want Difficulty in measuring and predicting consumer behaviour: humans don’t all behave in the same way all of the time. Hard to reach customer segments once identified: it is one thing spotting a segment; it is another reaching target customers with an effective marketing message

Market Segementation Now you try it! Using the case studies…. Or put a few up here on the screen Identify the market segmentation by categories Identify the demographic segmentation & which one(s) would be better also looking at geographic segmentation?

Case Study No/Company name: This company targets a Niche Mass Range of customers Circle the relevant group The demographic segmentation groups include: Benefits of targeting this group are: Weaknesses of targeting this group are:

Plenary Why do businesses have marketing objectives? Market Segementation Plenary Why do businesses have marketing objectives? What does SMART mean? Can anyone list the 8 demographic market segmentation categories? Age Gender Income Religion Ethnic group Level of education Geographical Social class