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Market segmentation helps marketers sell more efficiently.


A. Identifying a target market by dividing the market into segments according
to customer needs and characteristics

Characteristics about the consumer:
76 million Baby Boomers 1946- 1964 51% of wealth
40 million Generation X 1965- 1976 Conservative $
77 million Generation Y 1977- 1997 Computerized
Disposable income: $ after taxes
Discretionary income: $ after paying all living costs
US Population is changing: California 1
state that
Caucasians are the minority.
Research indicates that there are almost 2 women to
Each guy in the United States.
Geographic Variables - statistics about where people live
people who live in the same area have similar needs
It is said that of the American population will be living in
CA, TX and FL. Why do you think this would be true or false?
Businesses look at 4 states for Hispanic markets: NY, TX, CA, and FL
used when segmentation by age and gender is not sufficient
involves family criteria
focuses on attitudes and values
- personalities and lifestyles
Have values changed in the past 10 years?
How has this influenced marketers?
What are some of the value changes?
Sometimes product benefits Segmenting the market by what does the product do for
you. How you behave.
Shoe MFGs divide the market based on the demands made on shoes
Of each activity.
Oily, dry, normal,
Are product benefits.

A. Costs more to differentiate packaging, promotion, etc. to
more than one market
B. Research and identification is costly
C. Production costs increase when the product is changed
to meet the needs of more than one market
D. Only used when the potential sales will exceed sales
from marketing to one larger group
E. Risk is involved with smaller diversified markets
The principles of a free enterprise system
Freedom of ownership

1. Direct competition
For example: McDonalds vs.
Burger King

The principles of a free enterprise system
2. Indirect competition
For example: McDonalds vs.
3. Price competition
For example: Wal-Mart
4. Non-price competition
For example: Nordstorm
The principles of a free enterprise system
are (cont)
5. Monopolies sole control over a
product and the means of producing it.

Risk potential for loss or failure
Profit All money left over from sales after
expenses have been paid & the incentive for
How does competition affect buyers &


Market share - the
portion of a market
controlled by a
particular company or

Product positioning has
come to mean the process
by which marketers try to
create an image or identity
in the minds of their target
market for its product,
brand, or organization.