1. Chapter 3 – Analyzing Your Customers What You’ll Learn
Identifying customers
What market segmentation is and the four methods used to segment a market
Analyze a target market
Differentiate between mass marketing and market segmentation

2. Identifying the Customer
Culture
Social Class
Community
Family
Gender

3. Culture
Culture: An integrated pattern of behavior, knowledge, and beliefs that are acquired from a group and passed on to future generations. Ex. Values, rituals

4. Values & Rituals
Values Ex. Cleanliness, individuality, honesty Ritual: A formalized act that is performed frequently. Ex. Holidays, brushing your teeth. Products & values that fit into an existing culture have a better chance of success than those that don’t.

5. Social Class
Social Class: A group sharing the same economic or social status. Ex. Income Education Occupation Members of a social class live in similar houses, think in similar ways, and purchase similar items. *Advertisers believe social class identifies potential customers most reliably.

6. Community
Community: A group of people with a common characteristic or interest living within a larger society. Ex. Neighborhoods Baseball card collectors Magazine/newspaper subscribers

7. Family
Family: A group of consumers. Brand loyalty can be passed from one generation to the next.

8. Gender
Advertisers present images that help to define the role of gender in purchasing their products, although differences in consumption are not well defined.

9. Decision Making Process
Step 1: Define the Problem. Step 2: Identify the Choices. Step 3: Evaluate the Choices. Step 4: Choose One. Step 5: Act on Your Choice. Step 6: Review Your Decision.

10. Analyzing Markets
Market segmentation is a way of analyzing a market by specific characteristics in order to create a target market

11. Types of Segmentation:
Demographics
Psychographics
Geographics
Behavioral

12. Demographics – statistics that describe a population in terms of personal characteristics.
Age
Baby Boom Generation
Generation X
Generation Y
Gender

13. Income Disposable income – money left after taking out taxes
Discretionary income – money left after paying for basic living necessities such as food, shelter, and clothing

14. Marital Status

15. Ethnic Background

16. U.S. Trend – The percentage of the Caucasian population is declining, while other ethnic populations increase.

17. Psychographics
Involves grouping people with similar lifestyles, as well as shared attitudes, values, and opinions.
Activities
Attitudes
Personality & Values

18. Music teachers, dancers, and other music lovers would be one category of people who share psychographic characteristics.

19. Geographics – Segmentation based on where people live

20. Behavioral Segmentation
Looking at the benefits desired by consumers, shopping patterns, and usage rate. Market benefits, not just the physical characteristics of a product

21. Behavioral Segmentation
Many businesses find that the 80/20 rule applies.
80 % of a company’s sales are generated by 20 % of its loyal customers.

22. Mass Marketing Vs Segmentation
Mass marketing is not as popular as it once was.
Niche marketing (the current trend) – markets are narrowed down and defined with extreme precision.

23. 5 Levels of Usage and Commitment
Nonuser
Switcher
New consumer
Brand-loyal consumer
Heavy user

24. Essential Elements of a Positioning Strategy
Substance
Consistency
Simple, Distinctive theme

25. Marketing Research
Marketing Research: The thorough investigation of the planning, preparation, and placement of advertisements. Why? The advertiser can create an advertisement that will accurately reflect the target market’s world.