Section 2.2 Market Segmentation Market

Age When marketers study age, they classify everyone according to certain generations
Each generation tends to have common bonds because they have collectively shared experiences
This makes it easier to target
The last three markets are:
Baby Boom(er) Generation
Generation X
Generation Y<br>

Baby Boomers 1946-1964 There are approximately 76 million baby boomers
As of 1/1/2006, a boomer will hit the age of 60 every 7 seconds for the next 19 years!
The number of Americans over 65 will double by 2030
Because of their large size and since their spending power increases as they get older, marketers spend a lot of attention to this group
They control 2.6 trillion and have about 51% of the wealth in the United States
They are prime targets for all types of luxury and recreational items
They will remain a strong market for all kinds of products geared towards an aging population<br>

Generation X 1965-1976 There are around 40 Million in this age group
Often products of duel career households or divorced parents
Have been bombarded with media from an early age
Tend to be savvy and skeptical consumers
Better educated than any previous generation
More financially cautious and conservative
Prime consumers of cosmetics, fashion, movies and electronics
Marketers use sharp images, humor and music to reach this group<br>

Generation Y – Millennials 1977- 2000 Around 77 Million of you! Most are children of Baby Boomers
Growing up during a computer revolution, very comfortable using a computer and searching the internet
Accustomed to doing more than one thing at a time
Strive to be different than their parents
Has 130 million in spending power and influences 250 billion in parent purchases; big ticket items like cars and computers
Many buy their own shampoo and toiletries
Marketers want to build brand loyalty by attracting consumers when their in their teens<br>

Gender Segmenting by gender is also a tactic of marketers
Gender-Neutral products may use different advertising media and messages when targeting men and women<br>

Income Marketers want to know how much money is available for spending on different products
Two types of money measurement are looked at; disposable and discretionary income

Disposable – money left over after taking out taxes (net)
Marketers who distribute and produce and distribute products that are necessities are interested in changes in consumer’s disposable income.<br>

Income - continued Discretionary Income – Money left over after paying basic living necessities like food and shelter and clothing
Marketers who sell luxury items are interested in changes in consumer discretionary income<br>

Ethnic Background The United States population is becoming more diversified, mainly because of increased immigration
The Caucasian population is declining while other ethnic populations are increasing
Understanding the culture and religion of your target market is very important…………….
Marketers may use ethically targeted magazines or media to reach ethnic markets<br>

Psychographics Involves studies of consumers based on social and psychological characteristics.
People’s attitudes, lifestyles, and values are studied by marketers
The way people spend their time and money are closely related to attitudes and lifestyles
People with similar interests and values are a way marketers gear their products/services towards them; Golf Digest, Photography, Sports Illustrated, Marie Claire, good Houskeeping<br>

Psychographics continued…. Trends
Marketers also observe changes in consumers households, the economy, politics and the workplace because these factors also contribute to changes in personal attitudes about health, time, fun, and living in general
Health and nutrition are big trends of the 21st century, as well as exercising and taking care of yourself
low-calorie, fat – free, low sodium, are just a few examples of foods you see in grocery stores
Fast-food chains also have lower calorie options and kids meals<br>

Trends continued… Workplace Trends – “Business Casual” Casual is the norm for a lot businesses
Wrinkle Reducer by Wisk is product geared toward this trend
We are encouraged to “take a break”, Mcdonalds, Ben and Jerry’s – indulge yourself, Women are Worth it –Loreal, Dove chocolate etc…
Time – has become a commodity to market
Recreation and vacations have become the # 1 luxury ofAmericans<br>

Trends continued… Before the recession there was an increase in spending with Entertainment such as concerts, Sports, electronics, theme parks etc…
Upscaling is also a trend; name brands and premium products; people define themselves through the products and brands they buy<br>

Geographics Refers to segmentation based on where people live
Geographically you can segment locally, regional, national, or global markets
Marketers study where people live to better target to them with media and ads
Some local businesses cater to their customers
Ethnic concentrations are also considered<br>

Product Benefits Segmenting by product benefits involves studying consumers’ needs and wants
Companies market product benefits not just the physical characteristics
Examples:
Soda ~ Diet, Caffeine free
Sneakers ~ Bball, Soccer, Football, Runners, aerobic
Shampoo ~ Dry, Oily, Straight, curly
Toothpaste ~ Cavity protection, Whitening, Sensitive Teeth etc.<br>