A market consists of people and organizations with the necessary purchasing power, willingness, and
authority to buy.
Consumer products: are purchased by the ultimate consumer for personal use (magazine, coffee, cell
phone, sports tickets)
Business products: are purchased for use directly or indirectly in the production of other goods or services
for resale (rubber for tires, cotton for clothes)
If u wants to determine the classification of an item, just think about who is going to buy the product,
who will use it, how and why the product will be used.
Target market: is the specific segment of consumers most likely to purchase a particular product.
Market segmentation: is the process of dividing a total market into several homogeneous groups. It is
used in identifying a target market for a good or service. Segmentation is the key to deciding a marketing
strategy. The role of market segmentation is to identify the factors that affect purchase decisions and then
group consumers according to the presence or absence of these factors.
4 Criteria for effective segmentation:
The segment must have measurable purchasing power and size
Marketers can find a way to promote to and serve the market
Marketers must identify segments large enough for profit potential
The firm can target a number of segments that match its marketing capabilities
Geographic Segmentation: dividing an overall market into homogeneous groups based on their locations.
Marketers usually use geographic segmentation when regional preferences exist and when demand for
categories of goods and services vary according to geographic region.
Demographic Segmentation (
also called socioeconomic segmentation)
: defines consumer groups
according to demographic variables such as gender, age, ethnic group, family life cycle, household type,
income and expenditure patterns which are the major categories.
Psychographic Segmentation: divides a population into groups with similar psychological characteristics,
values, and lifestyles – a person’s mode of living, needs, motives, perception, and attitudes to identify
divides consumers into 8 psychographic categories: innovators (high resources
and high innovation), thinkers, achievers, experiences, believers, strivers, makers, and
survivors (low resources and low innovation. There are 3 primary motivations: principle-
motivated consumer who has set of ideas and morals (thinkers and believers),
achievement-motivated consumers influences by symbols of success (achievers and
strivers), and action-motivated consumers who seek physical activity, and adventure
(experiencers and makers).