Define Demographics, Psychographics, and Market Segmentation.
Market segmentation refers to the process of splitting the target market into various segments, groups or clusters based on factors like psychographic, demographic, behavioral and psychological (Kotler and Armstrong, 2001). This process helps marketers to gain a better understanding of their target audience and hence make their marketing efforts more effective. Demographics is the process of dividing customers into clusters based on factors such as income, religion, race, social class, nationality, education, occupation, gender age and family size (Kotler and Armstrong, 2001). Psychographics is all about personality, and it divides customers according to their opinions, lifestyles, interests, values, and attitudes (Kotler and Armstrong, 2001). These personality factors help marketers to segment customers. For instance, the bank could tailor a product and an advert for the same, targeting elder people. In actual sense, such an advert is aimed at a wider personality group.
Potential Target Segments Using Demographics and Psychographics That May Meet the Bank’s High-Level Strategic Goals
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The bank is interested in two segments. One is the family life-cycle sub-group, and the other is the baby boomer group. The first group is determined by a mixture of marital status, age and the number of children (Kotler and Armstrong, 2001).
The baby boomer cluster is the best segment to target based on their needs, wants, and psychographics of that segment. People in this group were born between 1945 and 1965 (Kotler and Armstrong, 2001). The group is large and influential thus becoming the best target for the bank. Obviously, the bank values middle-aged, young singles, and young married people because most of them have jobs and disposable incomes. This group accounts for roughly half of all spending in the United States (Kotler and Armstrong, 2001). The bank has realized that many of these people are hardworking and have enough money to save in a bank account. A good number of these people are seeking loans and financial support to secure homes, start businesses and even further their education. The bank is in the business of meeting these and many more needs. Therefore, these needs can help the bank achieve their long-term strategic goal of increasing profits. Therefore, the bank will advertise in local newspapers and offer discounts to those who apply for products such as loans.
References
Kotler, P. and Armstrong, G. (2001). Principles of Marketing , ninth ed., Upper Saddle River, NJ: Prentice Hall.
