Explain the concept of market and market identification Marketing 1.02-B Explain the concept of market and market identification

What is a Market? A market are those who have: A need or desire, and The ability to pay, and The willingness to buy (soon)

Target Market A target market are those who: Are grouped within a market by what they have in common Are the customers the business seeks to attract Ipad

Importance of Target Markets Every customer belongs to a number of markets Customers are targeted in the consumer market, and businesses are targeted in the industrial market The same customer or business can be included in more than one target market Markets usually change over time

Mass Marketing Mass marketing is designing products and directing marketing activities to appeal to the whole market (lightbulbs) Advantages: communicates a broad message to as many customers as possible More cost-effective Businesses don’t have to pay for the production of similar products Can price and distribute one type of product more easily than many Can send one promotional message to everyone

Mass Marketing Disadvantages: The diversity of the audience Only a small percentage of the mass market is likely to purchase the product

Market Segments Dividing the market into smaller groups in order to target each group individually Advantages: meets the needs of customers, more precise than mass marketing, more effective communication Provides an efficient way for smaller firms to compete with larger businesses

Market Segments Disadvantages: takes more resources to be successful, more difficult to reproduce, requires more creativity and money

Why are market segments increasing? Segment marketing is more efficient in the long run Customers today are more discerning about purchases Not influenced by mass marketing alone Meets customer’s needs More opportunities for growth

Market Segmentation Market segmentation is the division of a total market into smaller, more specific groups as a way to meet the needs of customers Demographic segmentation Geographic segmentation Psychographic segmentation Behavioral segmentation

Demographic Segmentation Demographic segmentation is dividing the market on the basis of its physical and social characteristics Gender: indicates purchase preferences (female) Origin or heritage: race, ethnicity, nationality (Caucasian) Religion (Christian) Social or economic status: education level, occupation, income (Middle-Class) Life stage: age, generation, marital status, family life cycle, family size. (Teens)

Geographic Segmentation Geographic Segmentation is the division of a market on the basis of where consumers are located. Determine customers’ purchase preferences according to climate, political boundaries, or population density Marketers discover Where their markets are located Who their competitors are Which media will reach their customers Businesses can market to customers based on location

Psychographic Segmentation Psychographic segmentation is the division of a market on the basis of consumers’ lifestyles personalities. Values, motives, attitudes, opinions, interests, activities, personalities, and lifestyles It gives a clearer picture of customers’ needs and wants based on personality and lifestyle.

Behavioral Segmentation Behavioral segmentation is dividing a market on the basis of consumers’ response to a product. Marketers look at the cause and effect nature of customers’ purchase decisions Examine what customers respond to when they buy a particular product

Behavioral Segmentation Customer questions in behavioral marketing: How will the product benefit me? Am I ready to buy it? When will I use the product/ On what occasions? How often? Am I in a comfortable buying pattern? Do I feel loyal to a particular brand?