Market Segmentation Ms. Sidi

Group Discussion Your team is in charge of selling one of the following products. Who do you think will most likely purchase your product? Why? Discuss 1. Diapers 2. Wedding gowns 3. Cologne

As marketers and business people, we will sell our products to whomever will buy it As marketers and business people, we will sell our products to whomever will buy it Wedding gowns to seniors Wedding gowns to seniors Cologne to a female teenager Cologne to a female teenager Yet these aren’t our “most likely customers” Yet these aren’t our “most likely customers”

Everyone has unique physical features, personality, values, beliefs, geographic location and history Everyone has unique physical features, personality, values, beliefs, geographic location and history These differences are demonstrated by the daily decisions and behaviours these different people make These differences are demonstrated by the daily decisions and behaviours these different people make As a marketer, the more we know about our potential customers, the better we are able to anticipate or influence their buying decisions As a marketer, the more we know about our potential customers, the better we are able to anticipate or influence their buying decisions

Marketers therefore create “Consumer Profiles” of the kind of people most likely to be attracted to a specific product Marketers therefore create “Consumer Profiles” of the kind of people most likely to be attracted to a specific product Each identified group of consumers with common characteristics and buying habits is called a “consumer segment” which is accomplished through the process of “segmentation” Each identified group of consumers with common characteristics and buying habits is called a “consumer segment” which is accomplished through the process of “segmentation”

Once identified, marketers will focus their efforts on trying to reach and influence these segments Once identified, marketers will focus their efforts on trying to reach and influence these segments For some products, there may only be one segment, for others there may be multiple segments For some products, there may only be one segment, for others there may be multiple segments Examples: Examples: One segment: Wedding Gowns (females, 20-30, getting married) One segment: Wedding Gowns (females, 20-30, getting married) Multiple segments: Levi Jeans (how you sell jeans to teens is different than middle age, etc.) Multiple segments: Levi Jeans (how you sell jeans to teens is different than middle age, etc.)

Let’s look at how this is done… Categorizing potential consumers in this way enables marketers to direct their efforts toward a target market, a specific group of consumers who will be most interested in their product Categorizing potential consumers in this way enables marketers to direct their efforts toward a target market, a specific group of consumers who will be most interested in their product

Demographics The study of obvious characteristics that categorize people. The study of obvious characteristics that categorize people. With your group, list 5 obvious characteristics that differentiate you from your classmates With your group, list 5 obvious characteristics that differentiate you from your classmates

Psychographics A system of measuring consumers’ beliefs, opinions, and interests A system of measuring consumers’ beliefs, opinions, and interests A way of profiling consumers on the way they “think” A way of profiling consumers on the way they “think” Religious beliefs, lifestyle, musical tastes, attitudes, etc. Religious beliefs, lifestyle, musical tastes, attitudes, etc. They are much harder to measure, yet they are vital in creating an effective customer profile They are much harder to measure, yet they are vital in creating an effective customer profile Why would it be important to learn about the psychographics of a potential consumer? Discuss with your groups Why would it be important to learn about the psychographics of a potential consumer? Discuss with your groups

Geographics A system of measuring “where” consumers live A system of measuring “where” consumers live Do your customers live: Do your customers live: in a rural / urban / suburban area? in a rural / urban / suburban area? Do they live in “pockets” or concentrations in certain places? Do they live in “pockets” or concentrations in certain places? IE: IE: Tractors – rural Canada Tractors – rural Canada Indian Cuisine – focus on areas of high Indian population Indian Cuisine – focus on areas of high Indian population Toronto Raptors – focus on urban / suburban GTA Toronto Raptors – focus on urban / suburban GTA

Profile CategoryProfile GroupTargeted Consumer Age Gender Income Family Life Cycle Culture Lifestyle/Values Country/City What is the target consumer for Gatorade? Consumer Profile

Conclusion A business will obviously sell their product to whomever they can, yet they need to focus their marketing efforts on those who are most likely to buy it A business will obviously sell their product to whomever they can, yet they need to focus their marketing efforts on those who are most likely to buy it However, if a marketer is able to effectively profile their target market, they can then begin to create a marketing plan that focuses on that “target” However, if a marketer is able to effectively profile their target market, they can then begin to create a marketing plan that focuses on that “target” Although this doesn’t guarantee business success, your chances are much greater with a well researched and targeted customer Although this doesn’t guarantee business success, your chances are much greater with a well researched and targeted customer