Market segment: is a portion of a larger market whose needs differ somewhat from the larger market. Market segmentation involves four steps: Identifying product-related need sets, grouping customers with similar need sets, describing each group, selecting an attractive segment(s) to serve. The goal is develop a product focused solely on the needs of the segment this will meet the segment’s desires better than a firm whose product or service attempts to meet the needs of multiple segments.
Geographic segmentation- allows us to segment a market that is spread over a large geographic area into sub-markets that cover smaller geographic areas. Geographic segmentation usually involves dividing up geographic markets by using existing political boundaries, natural climatic zones, or population boundaries.
Demographic segmentation- occurs when one or more demographic traits are employed to divide a market. Typical demographic traits that are used include age, gender, race, ethnicity, marital status, family size and stage of the family life cycle.
Psychographic segmentation- bases divide markets based on differences in lifestyles or differences in personality traits. Lifestyle segmentation is one of the most popular and effective ways to create segments for consumer products. Consumer shopping behavior patterns include such things as the type of store shopped in, timing of purchases (i.e. time of day, week, or year), how much of a product is purchased on a given visit to the store, and how often the individual frequents a particular type of retail establishment or shopping mall.
Behavioral segmentation-include product consumption or usage rates base (as discussed earlier). Other segmentation bases included in this category are product usage occasion, product use versus non-use, and loyalties to specific brands.
Harley-Davidson has change their market segment by attacking the market globally in different areas of the country. Harley noticed next to China, India is the second largest two-wheelers market in the world. More than 500-600 super bikes are sold every year in India. The super-bike segment in India is currently dominated by Japanese bike makers including Honda, Suzuki and Yamaha. Another way Harley-Davidson is changing their segments is by reaching more diverse customer pool, even as the company consistently grows with their traditional customer base.
“In 2012, U.S. sales of new Harley-Davidson motorcycles to our “outreach” customers — young adults 18-34, women, African-Americans and Hispanics – grew overall at more than twice the rate as sales to our traditional U.S. customer base of Caucasian men, ages 35-plus.” For the fifth straight year in 2012, Harley-Davidson was the number one seller of new street motorcycle to each of these groups. In fact, Harley-Davidson experienced double-digit market share gains from 2008-2012 in the U.S. with these segments. Q4.
Marketing potential in general boils down to a very basic formula. It figures out a customers’ profile (who you want to target with your marketing) and combine that with the geographic size you want to target (how many of those people are in that area). This is a general market potential. It relates to target market because it narrows down the customers that are more advantages to buy the product per contra to not having not having a target market which puts a higher risk for product sale but also enables a large slice of the market. Website: http://courses.unt.edu/kt3650_7/sld006.htm