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: 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.