Chapter 2: Basic Marketing
Concepts
SECTION 2.2
MARKET SEGMENTATION
What You’ll Learn
 What market segmentation is and the four methods
used to segment a market
 The current demographic, psychographic, and
geographic trends
Analyzing Markets
Market Segmentation is a way of analyzing a
market by specific characteristics in order to create a
target market.
Methods:
1.
2.
3.
4.
Demographics
Psychographics
Geographics
Product Benefits
Demographics
 Demographics – statistics that describe a
population in term of personal characteristics which
include:



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
age
gender
income
ethnic background
education
occupation
Psychographics
Involves studies of consumers based on social
and psychological characteristics.

Trends:
Health (Kellogg’s Special K)
 Workplace (Dressing Down)

Geographics
 The segmentation of the market based on where
people live.
 Where people live is often studied in relation to age,
ethnic background, and income.
Product Benefits
 Segmenting a market by product benefits involves
studying consumers’ needs and wants.

Example:
Nike (running, walking, tennis, basketball, soccer, baseball,
football, etc.)
 Coke (diet, caffeine free, zero, etc.)

Quiz
1.
Name four methods of segmenting a market.
2. What is the definition of demographics?
3. T/F: Psychographics is a way of segmenting a
market.
4. T/F: Geographics is the process of segmenting a
market based on where people live.
5. List an example of segmenting a market by product
benefits.