Market Segmentation

B2C Psychographic segmentation

Grouping consumers by subjective mental or emotional attributes, such as lifestyle, personality, interests, attitudes, preferences, etc.

Mass customization

Tailoring products/services to the tastes of individual customers; for instance, build to order products (making the product only when there is an order from a customer)

What are 3 market segmentation strategies?

(1) One product with multiple market segments (2) Multiple products with multiple market segments (3) Mass customization

B2B Behavioral segmentation by usage rate

Businesses that frequently buy products/services may be put in a different segment than companies that buy less frequently.

Positioning

The place a product occupies in consumers' minds based on important attributes relative to competitive products

Market segmentation

The process of putting prospective buyers into groups that (1) have common needs and (2) will respond similarly to a marketing action

B2B Demographic segmentation by number of employees

The size of the firm is related to the volume of products/services needed, so firms with different numbers of employees can be classified in different B2B segments.

Why do businesses segment markets?

To respond to the wants of groups of potential buyers in hopes of increasing the company's sales and profits

What are some ways to segment B2C markets?

Demographic segmentation Geographic segmentation Psychographic segmentation Behavioral segmentation

What are some ways to segment B2B markets?

Geographic segmentation by statistical area, behavioral segmentation by usage, and/or demographic segmentation (such as NAICS code or number of employees)

B2C Demographic segmentation

Grouping consumers by characteristics, such as age, gender, ethnicity, income, occupation, etc.

B2C Behavioral segmentation

Grouping consumers by observable actions, such as where and how frequently people buy.

B2C Geographic segmentation

Grouping consumers by where they work or live, such as zip code, city, state, rural vs. urban areas, etc.

B2B Demographic segmentation by NAICS code

Firms categorized by the North American Industry Classification System (NAICS) code as manufacturers that deal with customers throughout the world might have different needs than companies that only serve local customers.

B2B Geographical segmentation by statistical area

Firms located in a city might receive a personal sales call, whereas those in a distant rural area might be contacted by telephone.

Target market

One or more specific groups of potential consumers toward which an organization directs its marketing program