Customer Market Segmentation• Aggregating prospective buyers into groups with similar needs that respond similarly to a marketing method, tactic, message, etc.• Homogenous in demographics, use of product• Process to determine best target markets for products• See text as well—p. 108
Target Customer ProfileDescription of a measurable, accessible,buying segment that shares similarcharacteristics, values distinct productbenefits, and represents a significantopportunity for sales volume over time.
Ways to Segment Consumer Markets • Geographic • Demographic • Behavioral • See chart in your text on p.109
Some Factors to Consider in Developing and Describing Target Markets●Demographics●Market size of market—profitable?●Expected growth in purchases--up●Customer purchasing habits—where/when●Customer needs/attitudes--benefits sought●Ability to reach them with marketing efforts
Sample Target Markets for Property Management Firm• Home owners who choose not to care for their property -Snow Birds living in the retirement community Golden Agers -Owners are all 55+ -2217 retirement homes in community -The average income in the retirement community is $75,000. -Approximately 60% of these owners hire a service to care for their yards. -Approximately 60% of homeowners are seasonal residence• Banks and Realtors -Foreclosed Homes -Homes up for sale
Sample Target B2B Customer Market Product: Office Furniture Target Market: Mid-sized Company ●Price sensitive ●Values ergonomics, durability ●Choose to purchase from dealer ●Less sophisticated buying process ●Purchases conventional products ●Represents 30% of local market ●Weathering economic downturn
Product Strategies• See chapters 9 and 10 in text• For your product/service, discuss in terms of: --Product Life Cycle --Branding strategy --Packaging ( if applies) --How is your product different from competitors (differentiated)? See page 241 What is your competitive advantage?
Pricing Strategies (see p. 294)• Price skimming—introduce product at price that will recoup your costs and customers willing to pay. What kinds of products use this strategy successfully?• Penetration pricing—set prices below competitors when introduced to quickly gain sales (and market share)—usually can’t raise later, but good for commodity products