Understanding Market Segmentation: Key Factors and Strategies

1. Warm-up: Wednesday, 02/05/14 • Overseeing how transportation will be taken care of is which marketing mix element? • Distribution • Transportation • Channel Management • Place 

2. Market Segmentation

3. Market Segmentation • The key to marketing & selling is to knowyour customer • You have to know what is cool, in order to continually reach your audience • Not all customers are the same • Use certain methods to reach certain customers

4. Market Segmentation • Market Segmentation is the process of identifying a target marketby 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.

5. Market Segmentation Facts • Why do marketer’s use market segmentation? • Very costly to target all groups • Must find the group of consumers who you have a clear competitive advantage • Use research to determine if the costs of development are effective • Determine if a group is significant enough to target • Specific information allows you to know your customers: • Buying Behavior, Values, Fashion Interests, etc… • Yesterday the students that were more specific were easier to create a product for

6. Market Segmentation • There are four key factors that marketers use to determine how to segment a market: • Demographics • Geographic Variables • Psychographic Variables • Buying Behavior

7. Demographics • Demographics: 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) • Occupation • Education • Income • Disposable: Money left after taxes • Discretionary: Money left after taxes & basic needs have been paid • Marital Status • Ethnic Background

8. Age Demographics

9. Gender Segmentation

10. Income

11. Ethnic Segmentation Ads Geely Automobile Holdings Ltd Pantene Pro-V

12. Marital Status

13. Psychographics • Psychographics involves grouping people with similar lifestyles, as well as shared attitudes, values, & opinions. • Examples: • People that like to read • Play video games • Travel • Politics • Religion

14. Geographics • Geographics: Refers to segmenting customers based on where they live. • Segment a market geographically can be done: • Locally, Regionally, Nationally, or Globally • Hispanic cultures are prevalent in L.A., Miami, New York, Texas, Arizona, etc.. • African American cultures are prominent in the south • States with high teen percentages: • Alaska, Utah, Arizona, Texas, California, & Idaho

15. Examples of Geogrpahic Marketing • Restaurants offering menu items that reflect local taste interest • Cracker Barrel & McDonald’s alters menu to reflect local tastes • Menu in south is different than menu in Northeast • Miller Lite developed a True to Texas Marketing Campaign • Magazines like Midwest or Southwest Living • Pepsi packaging products based on NFL Cities

16. Market Segmentation • Behavioral Segmentation: Involves looking at the benefits a customer desires, shopping patterns, & usage rate • Online, In-Store, Catalog, TV • Brand Preference • Luxury items • Always buy Apple, Nike, etc.. • Usage Rate • Most frequent, loyal customers are marketed towards the most

17. Low Carb v. High Protein v. Energy

18. Mass Marketing v. Segmentation • Mass Marketing: Occurs when a company uses a single marketing strategy to reach all customers • Products has universal appeal and few features to differentiate them from competitors. • Not as popular as it used to be because companies prefer to cluster consumers. • Niche Marketing: Narrowing down your market and using precision to create your products

19. Assignment • Find a picture(s) that contains at least 3 people who share the following characteristics: • Target market of Ardrey Kell • Demographics • Age • Gender • Ethnic Background • Income • Psychographics • Activities • Play sports • Clubs • Attitudes • Workout • Video games • Personality & Values • Class Clowns • Religious • Drama • Geographics • Does anyone have similar characteristics based on a geographical location • Dallas Cowboys Fans • Students who have just moved here • Certain Middle Schools • Buying Behavior • Brands • Colors • Fads • 2 points if picture is original • 1 point if picture is from the internet

20. Target Market Assignment Part II • Create a 6 slide PowerPoint (Can work with a partner) • Title Slide, AK Target Market, Demographics, Geographics, Psychographics, & Behavioral Segmentation • Upload the picture you found that reflects the segmentation group targeted • Determine the following for each group • Characteristics that connect this group • An item that they would purchase • Promotional methods you would use to attract them • Email: melissa1.shaffer@cms.k12.nc.us

21. Grading Sheet (two or less)

22. Examples • Crenshaw

23. Demographics: Age & Gender • High School Students • Female • Some characteristics of a product that would appeal to this audience are….. • An item that this demographic would purchase • Promotional methods that we would use for this demographic are….

24. Psychographics: Basketball Team • Characteristics that appeal to this group • Working out & basketball merchandise • Product: • Basketball shirts with the motivational saying on back • Promote: • Poster in girls locker room • Flyers on players lockers

25. Geographics • Characteristics that appeal to this group • An item that they would purchase • Promotional methods you would use to attract them

26. Buying Behavior • Characteristics that appeal to this group • Converse Shoes • An item that they would purchase • AK Socks • Flat billed hat • Promotional methods you would use to attract them • Buy One, Get One ½ Off

27. Commercials with Music • Old Navy: http://www.youtube.com/watch?v=v-7luX488iY • Windows: http://www.youtube.com/watch?v=whF9It6HGPk • Rolling Stones, Madonna, Aerosmith, • All-State: http://www.youtube.com/watch?v=LMExQgje9ck • G-Star Raw: http://www.youtube.com/watch?v=MwP8vRckByQ • Go Pro: http://www.youtube.com/watch?v=9mGzoG0CA5M • Beats: http://www.youtube.com/watch?v=T1ybN91jJV4 • Tropicana: http://www.youtube.com/watch?v=8pFfAvSH3_0 • Budweiser: • http://www.youtube.com/watch?v=_GeiOdHsW_8 • http://www.youtube.com/watch?v=qhX1NqhAkDM • Bud Light: http://www.youtube.com/watch?v=hD2STTFSgtw

28. Car Companies • KIA: http://www.youtube.com/watch?v=OuSfLoXq22w • Buick: http://www.youtube.com/watch?v=rt99ULx9iFM • Hyundai: http://www.youtube.com/watch?v=laoqANN3lmg • Chevrolet: http://www.youtube.com/watch?v=plqtYMwQQqI • Cadillac: http://www.youtube.com/watch?v=sKDapnoj0hM • Ford: • http://www.youtube.com/watch?v=X8uXrwhWVOM • http://www.youtube.com/watch?v=gUfN5fA-oWY

29. Music in Commercials • Windows: http://www.youtube.com/watch?v=031-DOEop48 • Gap: http://www.youtube.com/watch?v=Lfzl-2iSfbM • JC Penny: http://www.youtube.com/watch?v=EOYl5WPTNCY • Coca-Cola: • http://www.youtube.com/watch?v=ib-Qiyklq-Q • http://www.youtube.com/watch?v=dOkzRZWMLKA • http://www.youtube.com/watch?v=TkHA2pf1gvc • Pepsi: • http://www.youtube.com/watch?v=po0jY4WvCIc • http://www.youtube.com/watch?v=B7YTkw2-aVc • http://www.youtube.com/watch?v=_2smYVl0zrk • http://www.youtube.com/watch?v=AKKM8sP24BE • Mountain Dew: • http://www.youtube.com/watch?v=CcWnfduAS_E • http://www.youtube.com/watch?v=SD-ecR9uv1Q • http://www.youtube.com/watch?v=zGtIayHPWrM

30. Warm-up: Thursday, 02/06/14 • What is the marketing mix better known as the 4'P's? • Product, Place, Promotion, Price • Politics Promotion Price Product  • Production Product Producing Promotion  • Promotion Product Place Production