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Segmentation / Consumer Profiles • As marketers and business people, we will sell our products to whomever will buy it Ie: • wedding gowns to seniors • Retirement funds to a teenager • Yet these aren’t our “most likely customers” we need to optimize our marketing dollar….let’s get the “the most bang for the buck” • Everyone has unique physical features, personality, values, beliefs, geographic location and history • These differences are demonstrated by the daily decisions and behaviors these different people do • As a marketer, the more we know about our potential customers, the better we are able to anticipate or influence their buying decisions • Marketers therefore create “Consumer Profiles” of the kind of people most likely to be attracted to a specific product • Each identified group of consumers with common characteristics and buying habits is called a “consumer segment” which is accomplished through the process of “segmentation”. • Once identified, marketers will focus their efforts on trying to reach and influence these segments • For some products, there may only be one segment….for others there may be multiple segments • Examples: – One segment: Wedding Gowns (females, 20-30, getting married) – Multiple segments: Levi Jeans (how you sell jeans to teens is different than middle age, etc.) Let’s look at how this is done……... • Categorizing potential consumers in this way enables marketers to direct their efforts toward a target market, a specific group of consumers who will be most interested in their product DEMOGRAPHICS • The study of obvious characteristics that categorize people. • These characteristics include age, gender, family life cycle, income level and ethnicity and culture • Each characteristic is then subdivided into variables or ranges Let’s look at each of the main variables……… A. Age • Depending on the market, people are grouped into various groups • Stats Canada divides the population as such: • 0-15, 15-24, 25-44, 45- 64, 65-74, 75+ • Depending on the product / service, marketers need to determine the age group that will most likely purchase their product B. Gender • The classification of the population into either male or female • Marketers must determine whether the target market for their product or service is mainly male, female or both and strategize accordingly • Ie: • Male – Cologne, Tools, Cars, Football • Female – Perfume, Purses, Romantic Novels • Both – Groceries, Gas, Movie Rentals C. Family Life Cycle • A consumer’s stage in the family life cycle determines many of his or her wants, needs and purchasing patterns • Businesses use this demographic to determine who buys what for whom • Ie: • New Family – diapers, baby food • Older Family – Ipods, computers Examples of Family Life Cycle Stages • Single • Married (no children) • Family (young children) • Family (older children) • Empty Nesters (children left) • Retirees D. Income Level • Grouped by how much money the targeted consumer earns • Allows marketers to determine how many consumers can afford their product / service • In Canada, the average gross family income (before taxes) in 2008 is $ 90,000 • Based upon these statistics, marketers can generally define the Canadian population into the following income segments: • Wealthy / Affluent ($ 150,000 +) • Middle Income ( $ 50,000 - $150,000) • Lower Income ( $ 50,000 or less) E. Ethnicity & Culture • It is vital for a marketer to understand the ethnic and cultural differences of their market • Marketers must design their marketing strategy to appeal to their target market, yet make sure they don’t offend them Ie… Wedding Gowns – In our western culture, white is the norm – In India and parts of China, red is worn for “good luck” • Understanding our target market’s culture is essential to marketing success PSYCHOGRAPHICS • A system of measuring consumers’ beliefs, opinions, and interests. • A way of profiling consumers on the way they “think”… • IE: • Religious beliefs, lifestyle, musical tastes, attitudes, etc. • They are much harder to measure, yet they are vital in creating an effective customer profile GEOGRAPHICS • A system of measuring “where” consumers live • Do your customers live: • in a rural / urban / suburban area? • Do they live in “pockets” or concentrations in certain places? IE: • tractors – rural Canada • Indian Cuisine – focus on areas of high Indian population • Toronto Raptors – focus on urban / suburban GTA What is the target consumer for People magazine? Profile Category Profile Group Targeted Consumer Age Gender Income Family Life Cycle Culture Lifestyle/Values Country/City Profile Category Profile Group Targeted Consumer Demographics Age 25-40 Gender Female Income Middle Family Life Cycle Single or Married, No Children Culture ‘Western’ culture oriented. Hollywood references. Psychographics Lifestyle/Values Watches movies and television. Follows fashion. Buys name brands. Geographics Country/City North America, urban / suburban A business will obviously sell their product to whomever they can, yet they need to focus their marketing efforts on those who are most likely to buy it • However, if a marketer is able to effectively profile their target market, they can then begin to create a marketing plan that focuses on that “target” • Although this doesn’t guarantee business success, your chances are much greater with a well reseached and targeted customer The End !!
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