Chapter 2-Market and Market Segmentation

Markets and
Market
Segmentation
What is Market?
 “ a place where sellers and buyers exchange goods( or services) for an agreed
upon price.” Musselman and hughes
 “ a group of people or organizations that buy a particular good, service or
concept” Ivancevich and others
 “any mechanism that enables buyers and seller to strike bargains and to transact”
Byrns and Stone
 “A market is composed of people with needs to satisfy, the money to spend and
the willingness to spend” Stanton
 A market is composed of people with needs to satisfy, tne money to spend, the
willingness to spend and the ability to satisfy the objectives of the seller.
Types of Market
 1. Consumer Markets
 2. Industrial Markets
 3. Reseller Markets
 4. government Markets
 5. International Markets
Consumer Markets
 Buyers who intend to directly consume a product or service constitute a consumer

market
 An individual may belong to consumer markets, For instance, he may all at the
same time be a part of the entertainment marker, the drug market, the dry goods
market, the food market, etc.
Industrial Markets
 Organizations that require goods and services which are used in the production of
goods or services that they later sell or distribute at a profit to satisfy an objective.
 The movie industry that utilizes raw films in the production of movies may
referred to as the raw film industrial market.
 Manufacturers of chalk may consider universities as apart of their industrial
market.
 Poultry raisers may also regard restaurant as their industrial market.
Reseller Markets
 Refers to organizations that buy goods and services which they later sell at a
profit.
 Wholesalers and retailers of grocery items will qualify as a reseller market of
grocery manufacturers.
 The Meralco and various electric cooperatives in the Philippines buy electric
power from NGCP which are later resold to individual household or industries.
 Farmers sell their produce to persons who later sell them to other sellers or
consumers.
Government Markets
 Refers to government agencies that buy products and services for use in the
production of public goods and services.
 Manufacturers of uniforms, insignias, arms and transport equipment consider the
AFP as a government market.
International Market
 Refers to all type of buyers found abroad including consumers, producers,

reseller, and governments. Car producers in Japan, for example consider
Americans ,Asians and Europeans as their international market.
 Dairy farmers in New Zealand who export milk products to the Philippines
consider the Filipinos a as portion of their international market.
Market Segmentation
 A market segment is a subgroup of a particular market which is composed of units

with more or less similar characteristics.
 People may have similar wants, financial resources, geographic locations, buying
attitudes and buying patterns. These variables may be used individually to
segment a market.
 A market consist of various segments. The market for tires for instance, may be
subdivided into the following segments: (1) motor car (2) airplanes, (3) heavy
equipment and (4) special military and agricultural equipment.
 Market segmentation may be defined as the process of identifying the various
segments of a company's particular market.
Segmentation Strategies
 Concentration or single segment strategy
refers to that long –run decision of the company to deal only with a
particular segment of the market. A book publisher, for instance may consider only
colleges students and consequently, publish only college textbooks
 Multi-segment strategy
providing products or services to two or more segments of the target
market. The company may even serve the entire target. The Rex Book Store, Inc. is a
multi-segment marketer, in the sense that it publishes and sells college, high school
and elementary books.
Bases for Market Segmentation
 Geographic Segmentation
 Demographic Segmentation
 Psychographic Segmentation
 Behavioral Segmentation
Geographic Segmentation
 Requires dividing the market into different geographic units like nations, regions,
provinces, cities, towns or barangays.
 Manila Liwayway Publishing chose to serve its various clienteles by bringing out
into circulation. Liwayway magazine for the tagalogs, Banaag for the Ilocanos
and Bisaya Magazine for the Bisayans.
Demographic Segmentation
 Refers to dividing the market into segments on the basis of demographic variables
like age, sex, family size cycle, income occupation, education religion race and
nationality.
Psychographic Segmentation
 Refersto the classification of buyers or consumers

by some psychological characteristics they posses
in common.
 They may be grouped according to social class, life
style, or personality characteristics.
Filipino Social Classes
according to Hunt & others
 Upper class- (1% of total population)- composed of large landowners, highly
successful professionals, big business people and top government Officials.
 Upper- middle class (10% of total Population)- composed of owners of farms over
20 hectares, most professionals, operators of medium sized business, middle –
echelon government administrators, some university professors, managers of
banks, department stores and factories.
 Lower – middle class (20% of total population)- composed of lower –echelon
government workers, most professors, teachers, owners of farms 3 to 19 hectares,
nurses and some small business people.
 Upper-lower class(32% of total population) composed of factory workers, skilled
laborers, small farmers, store clerks, office workers and most sari-sari store
operators.
 Lower-lower class(37% of total population) composed of unskilled laborers,
farmers with less than 1 ½ hectares, most household servants, landless farm labor,
most tenant farmers, most physically handicapped people, peddlers and
scavengers.
Life style
 Refers to a person s pattern of living in the world as expressed in his of her
activities, interest and opinions.
 “ those unique ingredients, or qualities which describe the style of life of some
culture or group and distinguish it from others” Lazer
 Usually adapted by manufacturers of shoes and dresses.
Personality Characteristics
 Based on the theory that each person has a distinct personality that will influence
his or her buying behavior.
 “ the organization of biological, psychological, social, culture and situational
factors which underlies a persons behavior.”
Panopio & Others
 The study for instances provided information that “ Most Filipino consumers
make it a point to take snacks 64% of which take mid-morning snacks, 87% mid-
afternoon snacks and 39% after-dinner snack.”
Behavior Segmentation
 This term refers to the grouping of buyers on the basis of their knowledge, attitude, use, or
response to a product.
 Buyer behavior may be segmented according to various categories:
1. purchase occasion ( ex. Enrollment periods)
2. benefits sought ( ex. Halal)
3. user status ( non user, ex-users, potential users, first user)
4. usage rate ( light users, medium users, and heavy users)
5. loyalty status ( Brand)
those who buy only one brand of a product
those who buy two or three brands
those who shift from a brand to another
those who have no rand preference.
6. readiness stage
people who are unaware of the products
people who are aware of the products
people who are informed of the product
people who are interested of the product
people who are desirous of the product
people who are intend to buy the product
7. attitude toward products
enthusiastic attitude
positive attitude
indifferent attitude
negative attitude
hostile attitude
The enthusiastic attitude is the most desired by marketers while the hostile is the most
unwanted.
Life quotes
“ Choosing to be positive and grateful

for what you have now is going to
determine how you’re going to live the
rest of your life”
Question for Review
 1. Define Market?
 2. What are the different types of market?
 3. What is market segment? Market Segmentation
 4. Discus the usefulness of market segmentation?
 5. A single-segment strategy will, at times, work favorably for a firm and
unfavorably for another, discus why this is so?
 6. what are the major categories of market segmentation? provide examples of each
category?
ASSIGNMENT
1. Make a review of the advertisements appearing
in a newspaper or magazine. Label each ad with
the market segmentation category used.

Chapter 2-Market and Market Segmentation

Uploaded by

Copyright:

Available Formats

Chapter 2-Market and Market Segmentation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 2-Market and Market Segmentation

Uploaded by

Copyright:

Available Formats

Markets and

 Buyers who intend to directly consume a product or service constitute a consumer

 Refers to all type of buyers found abroad including consumers, producers,

 A market segment is a subgroup of a particular market which is composed of units

 Refersto the classification of buyers or consumers

“ Choosing to be positive and grateful

You might also like