Marketing 1.02-BExplain the concept of market and market identification
What is a Market?A market are those who have: A need or desire, and The ability to pay, and The willingness to buy (soon)
Target MarketA target market are those who: Are grouped within a market by what they have in common Are the customers the business seeks to attract Ipad
Importance of Target MarketsEvery customer belongs to a number of marketsCustomers are targeted in the consumer market, andbusinesses are targeted in the industrial marketThe same customer or business can be included inmore than one target marketMarkets usually change over time
Mass MarketingMass marketing is designing products anddirecting marketing activities to appeal tothe whole market (lightbulbs)Advantages: communicates a broadmessage to as many customers as possibleMore cost-effective Businesses don’t have to pay for the production of similar products Can price and distribute one type of product more easily than many Can send one promotional message to everyone
Mass MarketingDisadvantages: The diversity of the audience Only a small percentage of the mass market is likely to purchase the product
Market SegmentsDividing the market into smaller groups inorder to target each group individuallyAdvantages: meets the needs ofcustomers, more precise than massmarketing, more effective communicationProvides an efficient way for smaller firmsto compete with larger businesses
Market SegmentsAdvantages: meets the needs of customers, moreprecise than mass marketing, more effectivecommunication Provides an efficient way for smaller firms to compete with larger businessesDisadvantages: takes more resources to besuccessful, more difficult to reproduce, requires morecreativity and money
Why are market segments increasing?Segment marketing is more efficient in the long run Customers today are more discerning about purchases Not influenced by mass marketing alone Meets customer’s needs More opportunities for growth
Market SegmentationMarket segmentation is the division of a total marketinto smaller, more specific groups as a way to meetthe needs of customers Demographic segmentation Geographic segmentation Psychographic segmentation Behavioral segmentation
Demographic SegmentationDemographic segmentation isdividing the market on the basisof its physical and socialcharacteristics Gender: indicates purchase preferences (female) Origin or heritage: race, ethnicity, nationality (Caucasian) Religion (Christian) Social or economic status: education level, occupation, income (Middle-Class) Life stage: age, generation, marital
Geographic Segmentation Geographic Segmentation is the division of a market on the basis of where consumers are located. Determine customers’ purchase preferences according to climate, political boundaries, or population density Marketers discover Where their markets are located Who their competitors are Which media will reach their customersBusinesses can market to customersbased on location
Psychographic SegmentationPsychographic segmentationis the division of a market onthe basis of consumers’lifestyles personalities. Values, motives, attitudes, opi nions, interests, activities, per sonalities, and lifestyles It gives a clearer picture of customers’ needs and wants based on personality and lifestyle.
Behavioral SegmentationBehavioral segmentation is dividing a market on thebasis of consumers’ response to a product.Marketers look at the cause and effect nature ofcustomers’ purchase decisionsExamine what customers respond to when they buy aparticular product
Behavioral SegmentationCustomer questions in behavioral marketing: How will the product benefit me? Am I ready to buy it? When will I use the product/ On what occasions? How often? Am I in a comfortable buying pattern? Do I feel loyal to a particular brand?