Important Statistics• World population – 7 billion• USA population – 311 million(might reach 404 million by 2050)• USA population shifting from a majority Euro-whitepopulation to a society characterized by severalgroups:• Hispanic – now the largest minority population at over 15%; isstill fastest-growing• African American – expected to grow from 12.8 to 14%• Lesbian & Gay – Third-largest minority—estimated at 10%• Asian – now the fourth-largest minority• Many others
• Marketing professionals must monitor thepopulation and must shift marketing theories andmodels to fit consumer markets.• New marketing strategies are emergingto keep pace with the changingdemographics in the United States.• Segmentation is used by the marketingprofessional to target specific groups (targetmarkets) and their characteristics and behaviors.
Segmentation and its Uses•Segmentation—using one factor/variable selectsmembers from a group that share a particularcharacteristic– Specialization—Using segmentation, a companycan select one or more markets in which tospecialize in order to meet the subject’s needs.– Dividing the whole into parts—puts things into order– Understanding consumer groups, determining targetmarkets, and informing marketing mix andpositioning strategies.– Monitoring changes in the segments.
The Segmentation Process1. Select a market or industry.2. Select one or more segmentation bases.3. Select specific variables for bases.4. Identify and define each segment.5. Select one or more as target markets.6. Develop marketing mix strategies.
Defining a Viable SegmentIdentifiability: segments must be identifiable andmeasurable.Substantiality: segments must be of a size large enoughto justify marketing mix attention.Accessibility: segments must be reachable with thecustomized marketing mix.Responsiveness: segments must respond to a marketingmix customized to that segment.
Consumer Decision-Making ProcessAll are affected and influenced by personal and socialfactors.1. Problem Recognition2. Information Search3. Evaluation of Alternatives4. Purchase5. Post-purchase Behavior
Product Usage and Benefits• A consumer needs a product to satisfy a need ordesire. The product is the tool for the consumer toperform certain functions and realize certainbenefits.• Examples:Softball Bat: Tool to hit a softball. Benefit: improve hitting percentage, etc.Go to a WNBA game: Tool to be entertained; to seal a business deal.Benefit: have fun; transact business.Go to the fitness center: Tool to lose weight, get in shape, or other.Benefit: same.Subscribe to ESPN Magazine: Tool to keep up with sports news. Benefit:same.
Business Consumers• Types of business consumers: manufacturers, resellers,retailers, sports governing bodies, institutions, media sportsenterprisesBusiness to Business (B2B) marketing involves the marketingof products to individuals and organizations for purposesother than personal consumption. These consumerstypically acquire products and services for purposes ofmanufacturing, production, resale, operations,enhancement of a company’s position, or other businessrelated reason.• Segmenting business consumers is similar to segmentingend consumers.
Bases for Business Segmentation• Geographic Location• Customer Type• Customer Size (can be volume)• Product Use• Purchase Criteria (price, quality,reputation, delivery)
SPORT INDUSTRYSEGMENTATION: BY PRODUCTAND BUYER TYPESport Performance Segment:Sport performance as offered to theconsumer as a participation orspectatorial productSport Production Segment:Those products needed or desired forthe production of, or to influence thequality of, sport performance1. Outfitting Productsa. Equipmentb. Apparel2. Performance Production Productsa. Fitness Trainerb. Medical Carec. Sport Facilitiesd. Governing Bodies andOfficials1. Athleticsa. Amateur Sportb. Professional Sport2. Private Business Sport3. Tax-supported Sport4. Membership Supported SportOrganizations5. Non-profit Sport Organizations6. Sport Education7. Fitness and Sport Firms1. Professional Merchandising Products2. Promotional Events3. The Media4. Sponsorshipa. Single Event Sponsorshipb. Multiple Event Sponsorshipc. Single Team Sponsorshipd. Individual Sponsorshipe. Circuit or League Sponsorship5. Endorsementa. Individual Endorsementb. Team Endorsementc. Full OrganizationEndorsementd. Nonspecific Sport UseSport Promotion Segment:Those products offered as tools usedto promote the sport productSPORT INDUSTRYAll sport and related products – goods,services, places, people, and ideas –offered to the customer
Positioning the Sport Product/Business• Positioning is theprocess by whichmarketers try to createan image or identity inthe minds of their targetmarket for its product,brand, or organization.• It is how potential buyerssee the product, and isexpressed relative to theposition of competitors.The Positioning Process•Identify marketpreferences.•Identify currentpositioning strategy.•Does the current strategymatch the marketpreferences?•Develop positioningstrategy.