Chapter 3

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Chapter 3 Analyzing Your CustomersWhat Youll
Learn

• Identifying customers
• What market segmentation is and the four methods
  used to segment a market
• Analyze a target market
• Differentiate between mass marketing and market
  segmentation

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Identifying the Customer

• Culture
• Social Class
• Community
• Family
• Gender

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Culture

• Culture An integrated pattern of behavior,
  knowledge, and beliefs that are acquired from a
  group and passed on to future generations.
• Ex. Values, rituals

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Values Rituals

• Values
• Ex. Cleanliness, individuality, honesty
• Ritual A formalized act that is performed
  frequently.
• Ex. Holidays, brushing your teeth.
• Products values that fit into an existing
  culture have a better chance of success than
  those that dont.

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Social Class

• Social Class A group sharing the same economic
  or social status.
• Ex. Income
• Education
• Occupation
• Members of a social class live in similar houses,
  think in similar ways, and purchase similar
  items.
• Advertisers believe social class identifies
  potential customers most reliably.

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Community

• Community A group of people with a common
  characteristic or interest living within a larger
  society.
• Ex. Neighborhoods
• Baseball card collectors
• Magazine/newspaper subscribers

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Family

• Family A group of consumers.
• Brand loyalty can be passed from one generation
  to the next.

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Gender

• Advertisers present images that help to define
  the role of gender in purchasing their products,
  although differences in consumption are not well
  defined.

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Decision Making Process

• Step 1 Define the Problem.
• Step 2 Identify the Choices.
• Step 3 Evaluate the Choices.
• Step 4 Choose One.
• Step 5 Act on Your Choice.
• Step 6 Review Your Decision.

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Analyzing Markets

• Market segmentation is a way of analyzing a
  market by specific characteristics in order to
  create a target market

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Types of Segmentation

• Demographics
• Psychographics
• Geographics
• Behavioral

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Demographics statistics that describe a
population in terms of personal characteristics.

• Age
• Baby Boom Generation
• Generation X
• Generation Y
• Gender

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• Income
• Disposable income money left after taking out
  taxes
• Discretionary income money left after paying
  for basic living necessities such as food,
  shelter, and clothing

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• Marital Status

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• Ethnic Background

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U.S. Trend The percentage of the Caucasian
population is declining, while other ethnic
populations increase.
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Psychographics

• Involves grouping people with similar lifestyles,
  as well as shared attitudes, values, and
  opinions.
• Activities
• Attitudes
• Personality Values

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• Music teachers, dancers, and other music lovers
  would be one category of people who share
  psychographic characteristics.

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Geographics Segmentation based on where people
live
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Behavioral Segmentation

• Looking at the benefits desired by consumers,
  shopping patterns, and usage rate. Market
  benefits, not just the physical characteristics
  of a product

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Behavioral Segmentation

• Many businesses find that the 80/20 rule applies.
• 80 of a companys sales are generated by 20
  of its loyal customers.

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Mass Marketing Vs Segmentation

• Mass marketing is not as popular as it once was.
• Niche marketing (the current trend) markets
  are narrowed down and defined with extreme
  precision.

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5 Levels of Usage and Commitment

1. Nonuser
2. Switcher
3. New consumer
4. Brand-loyal consumer
5. Heavy user

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Essential Elements of a Positioning Strategy

• Substance
• Consistency
• Simple, Distinctive theme

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Marketing Research

• Marketing Research The thorough investigation of
  the planning, preparation, and placement of
  advertisements.
• Why?
• The advertiser can create an advertisement
  that will accurately reflect the target markets
  world.