IDENTIFYING MARKET SEGMENTS AND TARGET MARKETS Flashcards
What is market segmentation?
Divides a market into well-defined slices. A market segment consists of a group of customers who share a similar set of needs and wants.
What is geographic segmentation?
Divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods.
What variables are considered in demographic segmentation?
- Age
- Family size
- Family life cycle
- Gender
- Income
- Occupation
- Education
- Religion
- Race
- Generation
- Nationality
- Social class
How does age affect consumer wants and abilities?
Consumer wants and abilities change with age.
What defines a person’s life stage?
Major concerns such as going through a divorce, entering a second marriage, or caring for an older parent.
How do men and women differ in market behavior?
Men and women have different attitudes and behaviors based partly on genetic makeup and socialization.
Why is income segmentation used?
Long-standing practice in categories such as automobiles, clothing, cosmetics, financial services, and travel.
What influences each generation or cohort?
The times in which it grows up, including music, movies, politics, and defining events.
What is the age range typically associated with Millennials (Gen Y)?
People born between 1977 and 1994.
What is the Silent Generation?
Those born between 1925 and 1945, redefining what old age means.
What defines Baby Boomers?
Approximately 76 million U.S. consumers born between 1946 and 1964.
What is Gen X known for?
Approximately 50 million consumers born between 1964 and 1978, often overlooked in demographics.
What does multicultural marketing recognize?
Different ethnic and cultural segments have sufficiently different needs and want targeted marketing.
Why is the Asian American market referred to as the ‘invisible market’?
It has traditionally received a disproportionately small fraction of U.S. companies’ total multicultural marketing expenditure.
What are the characteristics of African American consumers in the market?
- Most fashion-conscious
- Motivated by quality and selection
- Influenced by their children when selecting products
- Less likely to buy unfamiliar brands
What distinguishes Hispanic Americans in marketing?
Different needs and tastes than their foreign-born counterparts and often prefer to communicate in English.
What percentage of the population does the LGBT market represent?
Estimated to make up 5 percent to 10 percent of the population with approximately $700 billion in buying power.
What is psychographic segmentation?
The science of using psychology and demographics to better understand consumers.
What is behavioral segmentation?
Divides buyers into groups based on their knowledge of, attitude toward, use of, or response to a product.
What are the five roles in buying decisions?
- Initiator
- Influencer
- Decider
- Buyer
- User
What is meant by ‘occasion’ in market segmentation?
Specific times or events in a person’s life that influence when they need, buy, or use a product.
What are the different user statuses in market segmentation?
- Nonusers
- Ex-users
- Potential users
- First-time users
- Regular users
How can markets be segmented based on usage rate?
Markets can be segmented into light, medium, and heavy product users.
What stages are included in buyer readiness?
- Unaware
- Aware
- Informed
- Interested
- Desiring
- Intending to buy
What are the categories of loyalty status?
- Hard-core loyals
- Split loyals
- Shifting loyals
- Switchers
What does multiple bases segmentation involve?
Combining different behavioral bases for a more comprehensive view of a market and its segments.
What are the major segmentation variables for business markets?
- Demographic
- Operating Variables
- Purchasing Approaches
- Situational Factors
- Personal Characteristics
What is the first step in the segmentation process?
Needs-Based Segmentation: Group customers into segments based on similar needs and benefits sought.
What criteria determine segment attractiveness?
- Market growth
- Competitive intensity
- Market access
What are the effective segmentation criteria?
- Measurable
- Substantial
- Accessible
- Differentiable
- Actionable
True or False: A segment is more attractive if it has numerous strong competitors.
False.
What makes a segment less appealing in terms of buyers’ bargaining power?
Strong or growing influence of buyers reduces attractiveness.
What happens when suppliers have strong bargaining power?
Suppliers can raise prices or limit supply, making a segment unattractive.
