MANAGEMENT OF MARKETING TARGET MARKETING

LEARNING INTENTIONS/SUCCESS CRITERIA I understand the role of market segmentation and target marketing in the marketing activities of an organisation SUCCESS CRITERIA: I can explain what market segmentation is I can give examples of market segments I can explain how market segments allow target marketing to take place I can explain why target marketing is better than mass marketing

MASS v TARGET MARKETING If you have a product that everybody in the market is interested in buying or consuming eg bread, chocolate, milk or soap then you are selling to the MASS MARKET. However, some customers are interested in buying certain types of product eg females like to buy cosmetics whereas men are more interested in buying car accessories. These types of product can be targeted at the type of people who regularly buy them by SEGMENTING THE MARKET.

MARKET SEGMENTATION This involves using market research information to split the consumers in your market into SEPARATE and IDENTIFIABLE groups (also known as SEGMENTS) with SPECIFIC WANTS.

MARKET SEGMENTS Consumers can be split into groups (segments) using the following characteristics: AGE – children want different products compared to adults GENDER – men want different products compared to women INCOME – people with a high income will buy different products compared to those on a low income OCCUPATION – products can be marketed to go with certain jobs eg stethoscope for a doctor or nurse

MARKET SEGMENTS CONT’D RELIGIOUS OR CULTURAL BELIEF – people with certain religions buy certain products eg Halal meat for people who are Muslim GEOGRAPHICAL AREA – people in different countries or areas of the same country have different product preferences and spending habits LIFESTYLE – many people have a sporting lifestyle and buy products associated with this

WHY IS MARKET SEGMENTATION IMPORTANT? When businesses know about the various segments within their market, then they can try and meet the different wants of each segment by dealing with each of them in a separate suitable way eg advertising the products in appropriate places that potential customers will look or packaging the product differently. This is known as TARGET MARKETING.

TARGET MARKETING EXAMPLE 1 Coca Cola differentiates its products to different market segments: DIET COKE for health conscious women COKE ZERO for health conscious men CAFFEINE FREE DIET COKE for children FLAVOURED COCA COLA for other soft drinkers

TARGET MARKETING EXAMPLE 2 Target markets may be smaller, but prices can be higher. http://news.bbc.co.uk/1/hi/8151011.stm

TARGET MARKETING BENEFITS The benefits of target marketing are: Increased customer satisfaction as individual needs and wants are being met Finding new markets to target thus increasing the number of customers and sales income Customer loyalty can be maintained more easily

TARGET MARKETING COSTS The drawbacks of target marketing are: INCREASED COSTS (having lots of different products to satisfy consumers can be costly) COMPLICATED TO MANAGE (many different products can be hard for businesses to keep organised)

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