Chapter 02 Section 2.2 [Autosaved].ppt

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Chapter 2  Basic Marketing Concepts 1

Marketing Essentials

Marketing

Essentials

 Chapter 2 Basic Marketing Concepts

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Should Marketers know something about their

customers? Why?

What should Marketers know about their customers?

What is target Marketing and what role does it play

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SECTION 2.2

What You'll Learn

 _{Market segmentation and the four}

methods commonly used to segment a market

 _{Current demographic, psychographic,}

and geographic trends

Market Segmentation

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SECTION 2.2

Market Segmentation

Why It's Important

Businesses must know who their customers are to achieve success. In other words, they must know their markets.

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Chapter 2  Basic Marketing Concepts 5 SECTION 2.2 SECTION 2.2

Market Segmentation

Key Terms Key Terms

 _{market segmentation}  _demographics

 _{Baby Boom Generation}  _{Generation X}

 _{Generation Y}

 _{disposable income}  _{discretionary income}  _{psychographics}

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SECTION 2.2

Market Segmentation

Dividing the total market into smaller groups of

people who share specific needs and characteristics is the essence of market segmentation.

http://www.clusterbigip1.claritas.com/claritas/Default.jsp

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SECTION 2.2

Market Segmentation

Businesses may segment or analyze a market by:

 _demographics  _{psychographics}  _geographics

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SECTION 2.2

Market Segmentation

Demographics refers to statistics that

describe a population in terms of personal characteristics. These include:

 _age

 _gender  _income

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SECTION 2.2

Market Segmentation

Marketers classify everyone according to certain age generation groups

Each generation tends to have shared experiences and common bonds.

Demographics: Age

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More Info about the Generations…

http://socialmarketing.org/archives/ generations-xy-z-and-the-others/

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Who are the Boomers?

fashion

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SECTION 2.2

Market Segmentation

Companies can expand their markets by

marketing to the other gender, or by marketing their products differently to men and women.

 _Example_{: Jockey entered the women}_’_s

market with Jockey underwear for women and doubled its sales.

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SECTION 2.2

Market Segmentation

Marketers want to know how much money is available for spending on different

products. They look at two types of income measurement:

Demographics: Income

 _{disposable income}  _{discretionary income}

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SECTION 2.2

Market Segmentation

Disposable Income = money left over after taxes.

_{Important for companies that produce and}

distribute necessities

Demographics: Income

Discretionary Income = money left after taxes

and paying for food, shelter, and clothing.

_{Important for companies that produce and}

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SECTION 2.2

Market Segmentation

Marketers often segment the market by ethnicity. Three largest ethnic groups within the

U.S.:

 African-Americans, Hispanics, and Asian-Americans.

These three groups will account for 33 percent of the U.S. population in 2005.

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Census 2000

SECTION 2.2

Market Segmentation

The United States conducts a census every ten years to determine the

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SECTION 2.2

Market Segmentation

Psychographics involves studies of

consumers based on social and psychological characteristics.

In addition to segmenting people by their leisure time interests, marketers observe trends and changes in households, the economy, politics, and the workplace.

Psychographics

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SECTION 2.2

Market Segmentation

Geographics refers to segmentation based

on where people live. Marketers study geographics in relation to:

_{ethnic concentrations} _age

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SECTION 2.2

Market Segmentation

Segmenting a market by product benefits

involves studying consumers' needs and wants.

Product Benefits

 _Example:_{Different shampoos are marketed}

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2.2

A

SSESSMENTSSESSMENT

Reviewing Key Terms and Concepts

1. What do demographics, psychographics, geographics, and product benefits have in common?

2. How can a market be segmented using demographics?

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Chapter 2  Basic Marketing Concepts 23 2.2

A

SSESSMENTSSESSMENT

Reviewing Key Terms and Concepts

4. Provide one example of how a marketer can segment a market based on product benefits.

5. Of what significance are the combined African-American, Hispanic, and

Asian-American populations to marketers?

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2.2

A

SSESSMENTSSESSMENT

Thinking Critically

How can Procter and Gamble market

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