WF SEM II 4.04 Target Markets

How Product Competition is Used to Define a Market Competition is becoming much more intense for most businesses. Businesses need to gather information about competitors' products and marketing activities in order to determine their strengths and weaknesses in order to help them to determine what they need to do to be more competitive.

Terms Market:A customer or a potential customer who has an unfulfilled desire and is financially able and willing to satisfy that desire. Any circumstances under which buyers and sellers exchange goods or services for a price Target Market: The group of consumers that a company desires to have as customers Niche Market: smaller group of the target market that a business can select to market goods and services PRODUCT(S): Marketing element referring to what goods, services, or ideas a business will offer its customers COMPETITION: The rivalry between two or more businesses to attract scarce customer dollars.

Customer vs. Consumer Terms: Customer: The person who buys or purchases the product Consumer: The person who uses or consumes the product

Pros/Cons of Mass Marketing Mass Marketing: A single marketing plan used to reach all consumers Pros Reach broad audience Consistent message Cons Spend $$ reaching outside target market Can’t tailor message to different segments

Market Segments Market Segments: different groups of customers with one or more shared characteristics Market Segmenting: Dividing the entire market into smaller groups (of people) who share similar characteristics. Allows businesses to customize products and marketing strategies

Pros/Cons of Market Segments Able to target message Able to target media Cons May miss part of segment Requires extra time to tailor message to market

Appealing to Target Markets in SEM Interested in SEM products Have disposable income to spend

The Increase of Segmented Markets Increasingly fragmented media Cable/satellite TV Web sites Magazines Increasingly fragmented products

Demographic segmentation Segmenting the market based on personal characteristics such as age, gender, income, ethnic background, education and occupation. Example: middle class, males, ages 20- 40, who are construction workers.

Market Segments 2-12 12-17 18-24 18-34 18-49 25-54 55+ 2-12 12-17 18-24 18-34 18-49 25-54 55+ Gender (M/F) Ethnicity Education level Income level

Geographic segmentation Segmenting a market based on where a person lives. Geographic segmentation can refer to local, regional, national or global markets. Example: A small local store will segment to the surrounding area like a town, while big companies like Nike market Internationally.

Value of Geographic Segmentation Limit marketing expenses to target consumers who live within certain area

Psychographic segmentation Segmenting the market based on values, attitudes and lifestyles. Example: People interested in professional football.

Psychographic Segmentation Limit marketing expenses to customers that behave with an inclination to buy your product

Behavioral segmentation Dividing consumers into groups according to their response to a product. Behavioral segmentation divides markets into groups based on what they are looking for in a product and why they buy the product. Example: Purchasing Nike shoes because Michael Jordan wears them.