1. MARKET IDENTIFICATION
OBJECTIVES
EXPLAIN THE IMPORTANCE OF MARKET IDENTIFICATION
DICUSS WAYS THAT A MARKET CAN BE SEGMENTED

2. THE MARKET Known as the consumer market
For marketers, a market is a customer or a potential customer who has an unfulfilled desire and is financially able and willing to satisfy that desire.
Composed of customers or potential customers
might be an individual who purchases a good or service to satisfy his/her personal desires
Known as the consumer market
includes individuals such as yourself, your friends, and your family.

3. CUSTOMERS OR POTENTIAL CUSTOMERS
Could also be businesses which purchase items for use in the operation of the business, for resale, or for making other goods.
Known as the industrial market
Includes producers, government agencies, wholesalers, and retailers.
More sales are made to the industrial market although the consumer market has more members.

4. CUSTOMERS WITH UNFULFILLED DESIRES
These customers have desires that have not been satisfied.
Example: You are offered a job but, in order to accept the offer you must have reliable transportation.
Unsatisfied desires motivate potential customers to make purchases.

5. FINANCIAL ABILITY
Unless a customer has money or the ability to get the money, they cannot be considered a market.
You may need the transportation but would not be considered part of the market if you could not pay for the transportation---car, bike, cab, bus, etc.

6. WILLINGNESS
Composed of customers who have the financial resources available to purchase the desired products and are willing to spend money in order to satisfy their desires.
If you have the money you must be willing to spend it.
If not willing to spend the money, you are not part of the market at this time.

7. For businesses to satisfy their customers, they need to determine who the market is for their products. Is it all people? Is it a select few who have a special need? Is it somewhere in between?

8. TARGET MARKETING
Defined as the identification and selection of markets for a business or for a product.

9. Importance of Target Marketing
When businesses determine their target markets, they can then begin to plan their marketing activities.
What promotions will best reach a market?
What prices will attract the market?
How can the products be made available to the market?
What products are desired by the market?
By knowing who their markets are and what they want, businesses can aim all of their marketing activities toward satisfying their consumers’ desires while accomplishing company goals.

10. IDENTIFYING TARGET MARKETS
MARKETING SURVEYS
OUESTIONNAIRES
DIRECT INTERVIEWS

11. MASS MARKETING MARKETING SEGMENTS
Businesses can plan their target-marketing activities in two, broad ways
MASS MARKETING
MARKETING SEGMENTS

12. MASS MARKETING
MASS MARKETING occurs when sellers design products that will appeal to most buyers and direct their marketing activities to the whole market.
Goal is to appeal to as many types of consumers as possible through one marketing plan
EXAMPLE--Henry Ford’s Model T

13. ADVANTAGES OF MASS MARKETING
LOWER PRODUCTION COST
LOWER PROMOTION COST

14. FACTORS WHICH CAUSE A DECREASE USE OF MASS MARKETING
1. INCREASED COMPETITION (from specialized stores)
forced companies to pay more attention to the specific needs of consumers
When a company isn’t meeting the needs of its customers, it allows the competition to step in and meet those needs.

15. DECREASED USE OF MASS MARKETING
2. MORE KNOWLEDGEABLE CONSUMERS
Tend to very discerning in the purchases that they make
Need to be convinced that a purchase will add value to their lives
They feel that products that are designed to meet the needs of everyone do not meet their specific needs

16. DECREASED USE OF MASS MARKETING
3. IMPROVED MARKETING RESEARCH METHODS
Companies can better determine the specific needs of their markets.
Increased use of a variety of marketing research methods is helping marketers determine consumers likes and dislikes so that goods and services better satisfy the product users.

17. MARKET SEGMENTATION
MARKET SEGMENTATION occurs when marketers divide the total market for their products into smaller, more specific groups, or segments.
A. Use of market segmentation is increasing.
Marketers are increasingly aware that people are not alike
People have different product needs and different reasons for buying.

18. MARKET SEGEMNTATION
B. Marketers plan their activities for specific, well-defined groups of consumers.
Tailor their product, price, place, and promotion activities to the segments with which they choose to work.
Might focus their efforts on one segment, a few segments, or all of the groups within the total market.

19. MARKET SEGMENTATION C. DISADVANTAGES OF M/S
1. Can increase costs of production
2. Can increase inventory costs
3. Can increase promotion costs

20. MARKET SEGMENTATION
D. Use of market segmentation has benefited both large and small companies by making them use their resources more efficiently.
Must focus their activities on what their customers want
Can focus efforts one one or a few markets, rather than try to be everything to everybody.

21. Businesses need to know as much as possible about their customers or potential customers.
Enables them to market their products efficiently
Can consider a variety of characteristics in order to learn about their markets.
DEMOGRAPHIC
GEOGRAPHIC
PSYCHOGRAPHIC
BEHAVIORAL

22. DEMOGRAPHIC SEGMENTATION
Dividing a market by characteristics people have in common that affect their purchasing power.

23. DEMOGRAPHIC SEGMENTATION
INCOME
Income levels tells marketers how much money a consumer has available to spend for goods and services.
Three, broad, income levels--high, middle, low
Actual dollar amounts attached to levels will vary according to current income conditions

24. DEMOGRAPHIC SEGMENTATION--INCOME
Marketers could promote their products to one or more of the income levels.
As income levels rise, so does the demand for certain goods and services.
HOUSING
VACATIONS
DINING OUT PREPARED FOOD ITEMS
ETC

25. DEMOGRAPHIC SEGMENTATION--INCOME
DISPOSABLE INCOME----The money you have left in your paycheck after taxes have been taken out.
DISCRETIONARY INCOME--The money you have left over after you have paid your bills.

26. DEMOGRAPHIC SEGMENTATION--AGE
Consumers in the same age group can have many of the same buying needs
EXAMPLE--Babies need baby food, teenagers wants CDs, and older adults need health-related services.

27. DEMOGRAPHIC SEGEMTATION--AGE
Commonly recognized markets based on age are:
Children’s market--children to age 10
Teenage market--ages
Young-adult market--ages
Middle-aged market--ages
Young old market--ages
Middle old market--ages
Senior market--ages
Elderly market--ages 85+

28. DEMOGRAPHIC SEGMENTATION--AGE
Percentage of the population in each age group varies over time.
Due to changes in the birth and life-expectancy rates.
Marketers need to examine product needs for each of the age groups.
Segmentation by age groups is practical for some products because consumer needs and wants change with age.

29. DEMOGRAPHIC SEGMENTATION--SEX
The roles of men and women are changing
Women are working longer and marrying later
Products that have traditionally been marketed to men are now being marketed to women, too.
Marketers need to be aware of trends so that potential markets are not overlooked.

30. DEMOGRAPHIC SEGMENTATION--EDUCATION
Can be an important basis for market segmentation
The higher the level of education, the better the quality of the product needs to be in order to satisfy the consumer.
These consumers are also more aware of the value received for the money that they spend.
Promotions to this group must be more truthful and technical that those to less-educated groups.

31. DEMOGRAPHIC SEGMENTATION--EDUCATION
Examples of education levels used for market segmentation
Eighth-grade education or less
High school diploma
Some college work
College degree
College degree plus

32. DEMOGRAPHIC SEGMENTATION--LIFE STAGE
The life stages of a family or household can create new markets.
Examples of life stages
Young, single people
Young married couples without children
Families--children at home (full nest)
Older, married couples without children at home (empty nest)
Older, single people

33. DEMOGRAPHIC SEGMENTATION--OCCUPATION
The market for some products can be segmented on the basis of occupation
Some occupations relate to certain products
Example--Auto mechanics and auto parts
Teachers and books

34. DEMOGRAPHIC SEGMENTATION--OCCUPATION
Marketers found it easier to work with categories of occupations than with individual occupations.
Categories of occupation used by marketers.
White-collar workers---business executives, lawyers, doctors, teachers.
Blue-collar workers--plumbers, factory workers
Service workers--police workers and salespeople
Farm workers--ranchers and farm workers.

35. GEOGRAPHIC SEGMENTATION
Grouping consumers according to where they are located.
One of the oldest methods of market segmentation
Marketers use such geographical divisions as
Regions States
Cities Rural Areas

36. GEOGRAPHIC SEGMENTATION
Use of this type of segmentation is easy to understand for some products
EXAMPLE--consumers in hot climates will prefer suntan lotions and lightweight clothing, while consumers in cold climates will be the market for heavy, warm clothing.

37. GEOGRAPHIC SEGMENTATION
Marketers need to be aware of the geographic shifts of our population.
Our society can move from one town to another, one state to another, or one country to another.
Recent trends indicate loss of customers from rural markets but an increase in customers for suburban markets.

38. PSYCHOGRAPHIC SEGMENTATION
Dividing consumers into groups based on their lifestyles and personalities.

39. PSYCHOGRAPHIC SEGMENTATION
LIFESTYLES refers to a person’s interests, values, and activities.
EXAMPLE: A consumer who is interested in running is a natural market for running clothes, shoes, magazines, and health products.
PERSONALITY is defined by a person’s individual qualities.
EXAMPLE: An individual with a bold, aggressive personality might be a market for fast, expensive, sports cars.

40. PSYCHOGRAPHIC SEGEMNTATION
Psychographic segmentation is difficult to measure.
It is much easier to determine whether is male or female.
P/S does provide valuable information to marketers.
The activities consumers participate in may determine the types of stores located in the area

41. BEHAVIORAL SEGMENTATION
Dividing consumers into groups according to their response to a product.
Grouped according to what consumers are looking for in a product and why they buy the product.
Types of behavioral segmentation are:
Rate of Use Benefits Derived
Loyalty Response Occasion Response

42. BEHAVIORAL SEGMENTATION
RATE OF USE
Segmentation on the basis of usage rate classifies consumers as heavy, moderate, light or nonusers of a product.
Marketers would focus on the heavy users because they will purchase more of the product than light users.
Who do you send your catalogs to, a golfer who plays four rounds a year or one that plays a hundred?

43. BEHAVIORAL SEGMENTATION
BENEFITS DERIVED
This type of segmentation classifies consumers on the basis of the benefits they desire from products.
EXAMPLE: some consumers might buy a sports car because of its quality while others might purchase the same car because of prestige.

44. BEHAVIORAL SEGMENTATION
LOYALTY RESPONSE
By studying the common traits of loyal consumers, marketers can determine what they have in common and can plan to attract other consumers who have similar traits.
EXAMPLE: A mother buys only Gerber brand baby food for her child because she believes it is the best, regardless of price or availability of other brands of baby food. The mother is exhibiting a loyalty response to the product.

45. BEHAVIORAL SEGMENTATION
OCCASION RESPONSE
Special occasions, such as birthdays, weddings, graduations, and ________ can prompt spending trends for some products.
By studying the occasion response of consumers, marketers can predict what special events result in demand for products.