Goal for today That you can both define and describe market segmentation and consumer profiles.
Market Segmentation Sort of like “heat-seeking missile”. Companies try and divide the market up into sub-groups based on key defining characteristics. This allows them to be more targeted in its marketing efforts. Can you name some market segments that businesses might deal with?
Market Segments Geographical region Age Income level EX: Volkswagen-Audi group. They own a number of brands that are targeted at specific types of consumers.
It’s about consolidation Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behaviour / characteristics The world is made up from billions of buyers with their own sets of needs / wants and behaviour. Segmentation aims to match groups of purchasers with the same set of needs and buyer behaviour. Such a group is known as a 'segment'.
The alternative to niche marketing The other option is to look at the market as a whole rather than segmenting. Businesses can generate profits by reducing costs through huge volumes of sales. This is known as mass marketing.
EX: Burger King The menu around the globe is pretty much the same. This saves them money in promotional activity, product development, packaging, etc. In this way they can generate more profit per whopper sold. Minor changes do exist though (dietary needs such as lamb for beef)
Consumer profiles In order to know who to target, businesses try to figure out who consumers are. To do this, they create consumer profiles (detailed breakdowns of the demographics of consumers). A good consumer profile should include Age Gender Income Social group
Consumer profiles Once a business knows who the key consumers are, it can target marketing activity specifically at them. Real-world example: Consider Sony Playstation. What does the consumer profile look like for their products?
Sony’s use of consumer profiles No coincidence that Sony deliberately chooses certain events to sponsor.