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WF SEM II
Target Markets
4.04
How Product Competition is Used to
Define a Market
• Competition is becoming much more
intense for most businesses.
Businesses need to gather
information about competitors'
products and marketing activities in
order to determine their strengths
and weaknesses in order to help
them to determine what they need to
do to be more competitive.
Terms
Market:A customer or a potential customer who has an
unfulfilled desire and is financially able and willing to
satisfy that desire. Any circumstances under which buyers
and sellers exchange goods or services for a price

Target Market: The group of consumers that a company
desires to have as customers

Niche Market: smaller group of the target market that a
business can select to market goods and services

PRODUCT(S): Marketing element referring to what goods,
services, or ideas a business will offer its customers

COMPETITION: The rivalry between two or more
businesses to attract scarce customer dollars.

Customer vs. Consumer
• Terms:
– Customer: The person who buys or
purchases the product
– Consumer: The person who uses or
consumes the product
Pros/Cons of Mass Marketing
Mass Marketing: A single marketing plan
used to reach all consumers

•Pros
•Reach broad
audience
•Consistent
message
•Cons
•Spend $$ reaching
outside target
market
•Can’t tailor
message to
different segments
Market Segments
Market Segments: different groups of
customers with one or more shared
characteristics
Market Segmenting: Dividing the entire
market into smaller groups (of people)
who share similar characteristics.


Allows businesses to customize products
and marketing strategies
Pros/Cons of Market Segments
•Pros
•Able to target
message
•Able to target
media
•Cons
•May miss part of
segment
•Requires extra
time to tailor
message to market
Appealing to Target Markets in SEM
• Interested in SEM products
• Have disposable income to spend
The Increase of Segmented Markets
Increasingly fragmented media
 Cable/satellite TV
 Web sites
 Magazines
Increasingly fragmented products

Demographic segmentation
Segmenting the market based on
personal characteristics such as age,
gender, income, ethnic background,
education and occupation.
Example: middle class, males, ages 2040, who are construction workers.

Market Segments
•2-12
12-17
18-24
18-34
18-49
25-54
55+
•Gender (M/F)
Ethnicity
Education level
Income level
Geographic segmentation
Segmenting a market based on where a
person lives. Geographic segmentation
can refer to local, regional, national or
global markets.
Example: A small local store will
segment to the surrounding area like a
town, while big companies like Nike
market Internationally.

Value of Geographic Segmentation
Limit marketing expenses to target
consumers who live within certain area

Psychographic segmentation
Segmenting the market based on
values, attitudes and lifestyles.
Example: People interested in
professional football.

Psychographic Segmentation
Limit marketing expenses to customers
that behave with an inclination to buy
your product

Behavioral segmentation
Dividing consumers into groups
according to their response to a
product. Behavioral segmentation
divides markets into groups based on
what they are looking for in a product
and why they buy the product.
Example: Purchasing Nike shoes
because Michael Jordan wears them.
