1. Market Segmentation Learning Goals
Describe market segmentation and the four methods used to segment a market
Analyze a target market
Differentiate between mass marketing and market segmentation

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

3. Types of Segmentation:
Demographics
Psychographics
Geographics
Behavioral

4. Demographics – statistics that describe a population in terms of personal characteristics
Age
Gender
Income
Ethnic Background
Education
Occupation

5. Age Generations have collective shared experiences and common bonds
Baby Boomers ( )
Generation X ( )
Generation Y ( ) also kown known as Millennials
Generation Z ( ) tech savvy (you!)

6. Target Market Baby Boomers (52 – 70 yrs old) Automobiles Roomy Safety
Products
Toyota Avalon
Buick Lacrosse
Lincoln Continental

7. Gender
Female
Male
Target only women or men with certain products.

8. Income How much money do people have to spend?
Disposable income – money left after taking out taxes
Discretionary income – money left after paying for basic living necessities such as food, shelter, and clothing

9. Marital Status Married Married with children (25% of total HH’s)
Less than 50% of total households
80% in 1950
Married with children (25% of total HH’s)
Divorced
Single, never married
Domestic Partnership

10. Ethnic Background
We are not only marketing to one culture, or one ethnicity!!

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

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

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

14. VALS™ is a marketing and consulting tool that helps businesses worldwide develop and execute more effective strategies. The system identifies current and future opportunities by segmenting the consumer marketplace on the basis of the personality traits that drive consumer behavior. VALS applies in all phases of the marketing process, from new-product development and entry-stage targeting to communications strategy and advertising.
Click on VALS to learn more and to take a survey to determine your VALS type

15. Geographics – Segmentation based on where people live
Local
Regional
National
Even Global

16. Geographics If you want to market snowblowers, where would you focus?
If you want to reach people aged 65+ where would you focus?

17. Behavioral Segmentation
Benefits desired by consumers
Shopping patterns
Usage rate.
Market benefits, not just the physical characteristics of a product

18. Behavioral Segmentation
Teenagers spend less than $75 per month on entertainment.
Teen-aged girls spend 15% more on music than boys
Many businesses find that the 80/20 rule applies.
80 % of a company’s sales are generated by 20 % of its loyal customers.

19. Mass Marketing Vs Segmentation
Mass marketing not as popular as it once was.
One kind of Coke
Niche marketing (the current trend) – markets are narrowed down and defined with extreme precision.
What happened to 7-Up?
The Uncola
Cee Lo Green