Market Segmentation

Todays objectives

To understand market segmentation and targeting.

To be able to evaluate the success of market segmentation for businesses.

Running a successful business involves 3Cs & 4Ps

Customer Company Competitor

Product Price Place Promotion

Today we are looking at the 3Cs

Customers
Knowing your customers is a vital tool in running a successful business

Market Segmentation.
Segment B
Segment A
Segment C

Segment D

Market Segmentation

This is where the market is broken down into smaller sub groups that share similar characteristics

Examples

Age Gender Income Religion Ethnic group Level of education Geographical Social class

Market segmentation

A B

Higher managerial, administrative or professional Intermediate managerial, administrative and professional C1 Supervisory, clerical, junior administrative or professional C2 Skilled manual workers D Semi and unskilled manual workers E State pensioners, widows, lowest grade workers.

Why is it important to understand ALL your customers?

The benefits they want (service or extras)

The amount they are able to or willing to pay

Media (e.g. television, newspapers, and magazines) they see to target your advertising at them.
The quantities they buy and what special offers catch their interest. The time and place that they buy

So which market segment customer would buy these?

Age Gender Income Religion Ethnic group Level of education Geographical Social class

Spanish villa

1_2 market segmentation task.ppt

Why is it important to know your customers?

Mass market

Range of customers Niche Whether your product appeals to the masses, a small niche or a range of different customers. Every business needs to MARKET its goods..

So which of these products have a Run-a-round

Niche?
Mass? Range of customers?

Take your poster of your product and move to the right area!
Spanish villa

Niche

Mass

Range of customers

Run-a-round
Take your poster of your product and move to the right area!

Niche
A small group of people

Mass
To a full range of people

Range of customers
A few very different set of groups will be attracted to these!

Spanish villa

So Market Segmentation is a lot more than advertising!

So who decides on the marketing budget and what direction the marketing plan goes?

The owner The Franchisor BoD Marketing manager Financial manager MD

Marketing Objectives

SMART Targets

Can anyone remember what S.M.A.R.T. stands for?

SMART Targets

Can anyone remember what S.M.A.R.T. stands for?

No its not an Ashcombe invention! Its a business tool.

Marketing objectives involve

Some examples

But none of these are SMART!

Examples of SMART targets

Demographic V Geographic Segmentation?

Segment B
Segment A

Segment C

Segment D

Demographic & geographic segmentation

Demographic segmentation
Dividing

the market into groups based on variables such as age, gender family size, income, occupation, education, religion, race and nationality

Geographic segmentation
Geographic

segmentation tries to divide markets into different geographical units

Geographic Segmentation

Regions: e.g. in the UK these might be England, Scotland, Wales Northern Ireland or (at a more detailed level) counties or major metropolitan areas Countries: perhaps categorised by size, development or membership of geographic region City / town size: e.g. population within ranges or above a certain level Population density: e.g. urban, suburban, rural, semi-rural

Limitations of Segmentation

Lack of information and data: some markets are poorly researched with little information about what customers want Difficulty in measuring and predicting consumer behaviour: humans dont all behave in the same way all of the time. Hard to reach customer segments once identified: it is one thing spotting a segment; it is another reaching target customers with an effective marketing message

Now you try it!

Using the case studies. Or put a few up here on the screen

Identify the market segmentation by categories Identify the demographic segmentation & which one(s) would be better also looking at geographic segmentation?

Case Study No/Company name: This company targets a Niche Mass Range of customers
Circle the relevant group

The demographic segmentation groups include:

Benefits of targeting this group are:

Weaknesses of targeting this group are:

Homework

Watch TV Adverts select one advert and write a summary of the demographic segmentation that the advert is aimed at.
Justify why you think the ADVERT specifically targets that group(s) of customers!

Plenary

Why do businesses have marketing objectives?

What does SMART mean? Can anyone list the 8 demographic market segmentation categories?

Age Gender Income Religion Ethnic group Level of education Geographical Social class