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Copyright © Texas Education Agency, 2012. All rights reserved.
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MARKET SEGMENTATION
Goals
Students will:
 Compare and contrast the advantages and disadvantages of
market segmentation and mass marketing.
 Distinguish among geographic, demographic, psychographic
and behavioral segmentation
 Explain the nature of marketing planning
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MARKET SEGMENTATION
Terms to know
 Market segmentation
 Demographics
 Geographics
 Psychographics
 Product Benefits
 Disposable Income
 Discretionary Income
 Affluent
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MARKET SEGMENTATION
Mass Marketing is when marketers attempt to
appeal to an entire market with one basic
marketing strategy utilizing mass distribution
and mass media.
Market Segmentation is way of analyzing a
market by specific characteristics in order to
create a target market.
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MARKET SEGMENTATION
Demographics refers to statistics that describe a
population by personal characteristics.
 Age
 Baby Boomers – 76 million babies born 1946-1964
 Control 51% of wealth.
 Spending power increases as boomers get older.
 Prime targets for luxuries and recreational items.
 Growing senior services and healthcare fields.
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MARKET SEGMENTATION
 Generation X – 40 million babies born 1965-1976
 Dual-income households or divorced parents.
 Tend to be savvy and skeptical consumers, better educated
than previous generations.
 Prime targets of cosmetics, fashionable clothing, movies, and
electronic items.
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MARKET SEGMENTATION
 Generation Y – 77 million babies born 1977-1997
 Growing up during computer revolution.
 Accustomed to interactivity and multi-tasking.
 Strive to be different from parents.
 Very comfortable with computers and “surfing the net”.
 Influence big ticket family purchases and have spending
power.
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MARKET SEGMENTATION
Gender
 Male
 Female
Income
 Disposable Income – Money left after paying taxes.
 Discretionary Income – Money left after paying for basic living
necessities such as food, shelter and clothing.
 Affluent; small percentage, but account for half of all
discretionary spending in U.S.
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MARKET SEGMENTATION
Ethnic Background – U.S. population becoming more
diverse.
 Caucasian population declining, while other ethnic
populations increasing.
 By 2025, African-American, Hispanic, and AsianAmerican populations are expected to represent 37.2%
of all Americans.
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MARKET SEGMENTATION
Ethnic Background – con’t
 To reach African-Americans, marketers may use
magazines such as Essence or Black Enterprise.
Marketers have learned that they must backup their
promotional activities with community support, such as
sponsoring Black History Month.
 Marketers must understand that Hispanics are a very
diverse group and comprises 21 nations.
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MARKET SEGMENTATION
Ethnic Background – cont’d.
 Approximately 70% of Hispanics are Roman Catholic
and the culture centers around family. Families tend to
be larger then the average U.S. family. Food marketers
know that when they sell products in Hispanic
neighborhoods, the package sizes must be large.
 Marketers should consider Spanish language television,
radio, and magazines.
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MARKET SEGMENTATION
Ethnic Background – con’t
 Asian-American population represents about 4% of U.S.
population.
 Americans of Asian decent is the fastest growing and
most affluent population group.
 Very diverse encompassing 16 countries.
 More Asian-Americans are college graduates then other
ethnic groups and higher percentage hold professional
jobs.
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MARKET SEGMENTATION
Psychographics – studies of consumers based on social
and psychological characteristics.
 Shared common interests such as golfing, fishing, cars,
and sports.
 Trends change based on generations, such as healthy
eating and exercising trends have increased in recent
years.
 Time is a commodity, people want time saving products.
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MARKET SEGMENTATION
Geographics refers to segmentation based on where
people live.
 Markets can be
Local – Dallas
Regional – Texas, Southwest
National – United States
Global – World
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MARKET SEGMENTATION
Product Benefits is segmenting the market by the
consumers needs and wants.
 Sports shoes based on people who jog, walk, play
basketball, etc.
 Shampoo that makes your hair shine or increases
volume for oily, dry, or normal hair.
 Foods that help you lose weight
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PICTURE SOURCES
http://www.sxc.hu/photo/519288
http://www.sxc.hu/photo/667713
http://www.sxc.hu/photo/834151
http://www.sxc.hu/photo/774483
http://www.sxc.hu/photo/910348
http://www.sxc.hu/photo/1262463
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