Product differentiation -
involves knowing that there's a difference between products, not attaching any loyalty or preference to
- short-sighted marketing strategy--instead of focusing on customer wants and needs, which change over time,
the company blindly
focuses on its product. A company loses sight of the Marketing Concept, which states that a firm should focus
on fulfilling customer
wants and needs as its goal, not pumping out a product.
characteristics should be used when segmenting markets into target
(Personal) Demographic -
are identifiable characteristics
of individuals and groups of people including age, sex,
ethnicity, income, education, occupation, family size, religion, social class, etc.
One of the types of characteristics
used by marketers in market segmentation because they are often closely linked to customers' product needs
and purchasing behavior and because they can be readily measured
Geographic Demographics -
identifiable characteristics of towns, cities, states, regions, and countries, and include
characteristics such as climate, terrain, natural resources, population density, etc.
refers to the mental profiles of consumers; it allows the marketer to define consumer lifestyles in
measurable terms. To define consumer lifestyles
, marketers examine consumer
activities, interests and opinions (AIOs).
Types of characteristics used to identify target markets, and includes things which affect consumers' patterns of living
such as personality characteristics, motives, and lifetyles.
For example, certain products are made to appeal to people
with specific lifestyles
identify target markets, and involve characteristics of behavior towards a specific product, such as user
, user rate, brand loyalty, etc. Such as whether a group of people use the product or not (user status) and how often
they use it (user rate). Frequent flier miles benefits used by airlines are an example of market segmentation based on
Consumer's ability to buy, which consists of gross, disposable and discretionary income.
Gross Income -
total amount of money made in a year by an individual, household or family.
- money a consumer has for paying for necessities such as food, shelter, clothing and transportation. What a
consumer has left after taxes
Discretionary income -
money that is left over after paying for taxes and necessities (disposable income)
. Used for luxury items
such as vacations. To calculate discretionary income use the following formula: Gross Income – (Taxes + Necessities) =