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Market Segmentation

Market Segmentation. Objective. Describe market segmentation and identify the four methods used to segment the market. Market Segmentation. Dividing the total market into smaller groups of people who share specific needs and characteristics. How do we do this?.

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Market Segmentation

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  1. Market Segmentation

  2. Objective • Describe market segmentation and identify the four methods used to segment the market

  3. Market Segmentation • Dividing the total market into smaller groups of people who share specific needs and characteristics

  4. How do we do this? Businesses may segment a market by: • Demographics • Psychographics • Geographics

  5. Demographics • Demographics refers to statistics that describe a population in terms of personal characteristics. These include: • age • gender • income • ethnic background

  6. Demographics • Demographics refers to statistics that describe a population in terms of personal characteristics. These include: • age • gender • income • ethnic background

  7. Demographics: Age & Gender • When marketers study age, they classify everyone according to certain generations, because each generation tends to have shared experiences and common bonds. • Baby Boom Generation: 1946-1964 Generation X: 1965-1983 Generation Y: 1984-2000 • Companies can expand their markets by marketing to the other gender, or by marketing their products differently to men and women.

  8. Demographics: Income • Marketers want to know how much money is available for spending on different products. They look at two types of income measurement: • disposable income: The amount of money that households have available for spending and saving after income taxes have been taken out • discretionary income:The amount of an individual's income that is left for spending, investing or saving after taxes and personal necessities (such as food, shelter, and clothing) have been paid. Discretionary income includes money spent on luxury items, vacations and non-essential goods and services.

  9. Demographics: Ethnicity • Marketers often segment the market by ethnicity. The three largest ethnic groups within the United States are African-Americans, Hispanics, and Asian-Americans.

  10. Psychographics • Psychographics involves studies of consumers based on social and psychological characteristics. • Classify by trends: • Fit or Fat? • Work or Fun? • Name brand or Generic? • Classify by interests: • Athletics, Movies, Entertainment

  11. Geographics • Geographics refers to segmentation of the market based on where people live.

  12. In Class Together • Backpack • Identify • Demographic • Psychographic • Geographic

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