Who is the target market for each of these systems Who is the target market for each of these systems? What features appeal to the target market? Wii X-Box Playstation

Multiple target markets Combined target markets Market Segmentation All customer needs Narrowing down to specific product-market Some generic market One broad product-market Segmenting into possible target markets Homogeneous (narrow) product-markets Selecting target marketing approach Single target market Multiple target markets Combined target markets

Market Segmentation Broad product-market definition means determining the general product/service markets that the company will compete in. What is Ford’s broad product-market? What is Tide’s? What is Taco Bell’s?

Market Segmentation Broad product-markets may be divided into submarkets. Here are submarkets for the bicycle product-market.

Segmenting Segmenting means grouping people together with similar needs into a “market segment” or “target market”. Segmenting means a group of similar people that respond well to a particular marketing strategy.

Segmenting A good market segment is: Homogeneous (similar) within the market segment Heterogeneous (different) between market segments Substantial – big enough to be profitable and worthwhile Operational – able to implement marketing programs to this segment. “People with blue eyes” is not operational

Segmenting ≠ Small Segmenting does not mean breaking the market into small segments. It means defining the broader market into smaller, manageable groups. In fact, good segmenting results in bigger sales and profits. Why?

Defining Market Segments There are several dimensions we can use to define consumer target markets: Demographic – descriptive data Behavioral – the actual actions that consumers undertake Geographic – the size and nature of consumer’s home location Psychographic – attitudes, beliefs, hobbies (we will discuss later)

Defining Market Segments Income Gender or age Demographic Segmentation Dimensions Family size or family life cycle stage Occupation or education Ethnicity or social class

Defining Market Segments Needs Information required Benefits Sought Type of problem-solving Behavioral Segmenting Dimensions Thoughts Kind of shopping Rate of use Brand familiarity Purchase relationship

Defining Market Segments Region of world or country Region in a country Geographic Segmentation Dimensions Size of city

Target Market Demographics: Female, Aged 18-21, College Student, Works Part-Time Geographic: Lives in the Northeast U.S. Behavioral: Shops at least once a week at the mall, buys clothes online, buys clothes 2-3x per month Psychographic: Is Liberal, likes to go to concerts, hiking and practices Yoga actively

Pick 3 of the products below and identify the primary target market Pick 3 of the products below and identify the primary target market. Be SPECIFIC. Email me your answers. Include Demographic, Geographic and Behavioral information Ford Focus Ford Mustang Taco Bell Jimmy Choo shoes NSHA H.S. Netflix

Ethical Issues Marketers are sometimes criticized for selecting particular marketing segments Is it ok to market expensive sneakers to lower income consumers? Is it ok to market high sugar products (like cereal) to kids? There is often not a clear cut “yes or no” answer.

CRM Technology has enabled smarter, more targeted marketing. Internet marketing in particular has the ability to target individuals (1-1 Marketing). Amazon sends out custom emails to individuals based on previous purchases.