Market Segmentation Section 2.2 p.37 - 41. Market Segmentation  Market Segmentation is the process of identifying a target market by dividing the market.

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<ul><li><p>Market SegmentationSection 2.2p.37 - 41</p></li><li><p>Market SegmentationMarket Segmentation is the process of identifying a target market by dividing the market into segments according to customer needs and characteristics.Basically you take a target market and break down into even smaller markets.This process is done so that marketers can sell their products or services more effectively.</p></li><li><p>Market Segmentation FactsVery costly to target all groupsMust find the group of consumers who you have a clear competitive advantage Use research to determine if the costs of development are effectiveSpecific information allows you to know your customers:Buying Behavior, Values, Fashion Interests, etc</p></li><li><p>Market SegmentationHow does market segmentation get accomplished?DemographicsGeographic VariablesPsychographic VariablesBuying Behavior</p></li><li><p>DemographicsDemographics: Refers to statistics that describe a population in terms of personal characteristics.Age (Baby Boom, Generation X, Generation Y, Generation Z)Gender (Male v. Female)Income Disposable: Money left after taxesDiscretionary: Money left after taxes &amp; basic needs have been paidMarital Status (Married couples with kids represent 25% of U.S.)Ethnic Background EducationOccupation</p></li><li><p>GeographicsGeographics: Refers to segmenting customers based on where they live.Segment a market geographically can be done:Locally, Regionally, Nationally, or GloballyHispanic cultures are prevalent in L.A., Miami, New York, Texas, Arizona, etc..African American cultures are prominent in the south</p></li><li><p>PsychographicsPsychographics involves grouping people with similar lifestyles, as well as shared attitudes, values, &amp; opinions. Examples:Latest Diet TrendsEnvironmental ConcernsBehavioral Buyers: Accounting for the type of shopping they prefer.Online, In-Store, CatalogSafety Issues concerning identity</p></li><li><p>Mass Marketing v. SegmentationMass Marketing: Occurs when a products have universal appeal and few features to differentiate them from competitors.Not as popular as it used to be because companies prefer to cluster consumers.</p><p>Niche Marketing: Narrowing down your market and using precision to create your products</p></li><li><p>Market Segmentation</p><p>Age: Old lady jeans v. Flared, Bootleg, low rise, stretchPrice: High roller v. cost cutterDesired Features: Pockets, belt loops, faded, washed out, style (carpenter, cargo, etc..)</p></li><li><p>Market SegmentationExample Product: Jeans</p><p>According to Forbes Magazine, Americans are willing to spend the following amount on a pair of jeans$20-$40 48%$40-$60 25%$80-$100 13%$100-$200 10%Over $200 4%</p></li><li><p>Market Segmentation ExampleMost Expensive Jeans</p></li><li><p>Market Segmentation ExampleLeast Expensive Jeans</p></li><li><p>Bell WorkWhy does Market Segmentation exist?What is the point of breaking down a large group of customers into a smaller, more specific group?Develop products that meet specific wants &amp; needs versus coming up with something you hope everyone will like.</p></li><li><p>Jean Example</p></li><li><p>Market Segmentation AssignmentYou must construct a market segmentation grid based on the music industry</p><p>Age must be one of the criteria you use to segment your marketIn my movie example I used13 and under (PG)14-17 (PG-13)18 and Over </p></li><li><p>Market Segmentation AssignmentThe other category for segmentation is of your choosing and needs to have at least 5 criteriaGender or Group SizeMale Solo ArtistMale DuoMale GroupFemale Sole ArtistFemale GroupFemale DuoGenre of MusicRap, Top 40, Classical, Country, Rock, R&amp;B, Latin, etc</p></li><li><p>Market Segmentation Example</p></li><li><p>Market Segmentation Example</p></li><li><p>Market Music SegmentationYou will need to print out a blank version &amp; an answer key</p><p>Your grade will be determined by how well someone in the class does on your market segmentation</p></li><li><p>Bell WorkWhat is the difference between disposable &amp; discretionary income?Disposable is your income after taxes are taken outDiscretionary is the amount of money you have left after taxes are taken out and your basic necessities are paid for</p></li><li><p>Bell WorkWhat are two things that go into an environmental scan?PoliticalSocio-CultureTechnologyEconomics</p></li></ul>

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