Market Segmentation, Demand, and Buyer Behavior

Market and Demand

The market is defined as all consumers who share the same need to satisfy and have the economic capacity to do so.

Types of Markets

• Degree of Competition: Markets can be divided into perfect competition or imperfect competition.
• Expansion Opportunities: This distinguishes between:
  • Current Market: Comprising the existing consumers at the time the analysis is performed.
  • Market Potential: The result of the sum of today's consumers that could be reached with an effective marketing policy.
  • Market Trend: Referring to the future evolution of the market, regardless of the actions of the companies. According to the trend, it may be growing, stagnant, or declining.
• Type of Purchaser:
  • Consumer Markets: In which goods and services are directly engaged to meet the needs of the family.
  • Industrial Markets: In which bidders are businesses or organizations, and demanders exchange goods for other goods.

Market Demand and Share

Market demand is the total quantity of sales that are generated in that market over a determined period of time and space. Market share is the proportion of sales of the company relative to the total sales of the market for a product.

Purchase Types and Buyer Behavior

Depending on the type of purchase, we can distinguish:

• High-Involvement Purchases: Where much effort is dedicated to reviewing and evaluating alternatives.
• Impulse Purchases: Where one first purchases and then decides or justifies the purchase.
• Routine Purchases: Standard, everyday purchases.

The characteristics of the buyer are influenced by:

• 1. Personal Factors: The internal motivations of individuals determine their preferences and strongly influence their purchase decisions.
• 2. Social and Cultural Factors: The social environment of a person affects their decisions. Both factors are closely related: human dependence on the opinion of others in their own self-assessment often leads to a constant search for approval from others in purchasing decisions.

Market Segmentation

Market segmentation is a process of dividing the market into groups of consumers with homogeneous patterns of consumption, which allows companies to establish a separate commercial offer for each segment.

Segmentation Criteria

• 1. Demographic Criteria: Different age groups, sexes, and circumstances tend to have distinct consumption patterns.
• 2. Geographic Criteria: Regions, urban, or rural areas present different consumption patterns to segment markets.
• 3. Socioeconomic Variables: The market can be divided according to income level, profession, and education.
• 4. Psychographic Criteria: Based on personality factors and individual values.
• 5. Repurchase Behavior: Consumers also differ in the frequency and size of the purchases they make, and the expected benefits they look for in the product or brand. Note that excessive segmentation reduces the size of the resulting groups.