9.2 Market sectors and segments Notes

Categories of Market Sectors

1. To succeed in the market, you must understand the differences between market sectors and design accordingly.
2. They help designers and businesses identify and target specific groups effectively, and there are two key ways to classify market sectors: geographical sectors and client-based sectors.

Geographical Sectors: Values, Culture, and Purchasing Behavior

1. Geographical sectors segment markets based on location.
2. But it’s not just about geography—it’s about the cultural, social, and economic values that shape consumer behavior in those locations.
3. For example: :
   1. Values and Culture
      1. Consumers in one region may prioritize sustainability, while others may value luxury and status.
      2. A company designing eco-friendly packaging might find more success in markets where environmental awareness is high.
   2. Purchasing Behavior
      1. Average income levels, access to technology, and regional trends influence what people buy and how they buy it.
      2. For instance, online shopping is more prevalent in urban areas with widespread internet access.

Client-Based Sectors: Consumers, Industrial, Public, and Commercial

1. Client-based sectors categorize markets by the type of client being served.
2. These include:
   1. Consumers: Individuals or households purchasing products for personal use, such as smartphones or clothing.
   2. Industrial: Businesses buying products for manufacturing or operational purposes, like machinery or raw materials.
   3. Public: Government entities or organizations purchasing products to serve the public, such as infrastructure materials or medical supplies.
   4. Commercial: Businesses buying products for resale or day-to-day operations, such as retailers or service providers.

Influence of Market Sectors on Design

1. Think about designing a chair:
   1. For consumers, the focus might be on style, comfort, and affordability.
   2. For the industrial sector, the chair might need to be stackable and durable for use in factories or workshops.
   3. For the public sector, such as schools, safety and ergonomics may take precedence.
   4. For the commercial sector, like restaurants, ease of cleaning and modularity might be important.

Impact on Manufacturing

1. Market sectors also influence production methods. For instance:
   1. Mass production is suitable for consumer products targeting large markets.
   2. Batch production might cater to commercial clients requiring moderate quantities.
   3. Custom production could serve public or industrial clients with specific requirements.

Classifications of Consumer Market Segments

1. Now that we’ve explored market sectors, let’s zoom in further: consumer market segments.
2. These are smaller groups within a consumer market, categorized based on shared traits.
3. Segmenting markets helps businesses tailor their products and marketing strategies more precisely.

Key Segmentation Criteria

1. Income: High-income consumers may seek premium products, while low-income groups prioritize affordability.
2. Profession: Professionals may prefer products that enhance productivity, such as ergonomic office furniture.
3. Age: Different age groups have distinct preferences. For example, teenagers might prioritize fashion trends, while seniors value comfort and practicality.
4. Family: Family size and structure influence purchasing decisions. A family with young children might focus on safety features in cars or furniture.
5. Purchasing Behavior: This includes loyalty, frequency of purchase, and brand preferences.

Development of a Product Family

1. A product family is a group of related products designed to target different segments of a market.
2. Think about how a single concept can evolve into multiple variations to meet diverse needs.

Why Develop a Product Family?

1. Broader Market Coverage: By offering variations, companies can appeal to multiple segments without losing focus.
2. Brand Loyalty: Consumers who buy one product in a family are more likely to purchase related products.
3. Economies of Scale: Shared components reduce production costs.

Designing for Single Sectors

1. Some products are tailored exclusively for one sector.
2. For example:
   1. Medical equipment is designed specifically for the public sector.
   2. High-end fashion targets the luxury consumer market.fashion targets the luxury consumer market.

Designing for Multiple Sectors

1. Other products are versatile, serving multiple sectors.
2. For instance:
   1. A smartphone might appeal to consumers, businesses, and even public institutions, depending on its features and pricing.

Impact of Market Segments on Production

Market segmentation doesn’t just influence design—it also affects how products are manufactured.

Scale of Production

• Mass Production: Suitable for products targeting large consumer markets, like smartphones.
• Batch Production: Ideal for products with moderate demand, such as office furniture.
• Custom Production: Necessary for niche markets, like specialized medical devices.

Flexibility in Manufacturing

Manufacturers may need to adapt production lines to accommodate product variations within a family. For example, a car factory might produce sedans, SUVs, and electric vehicles on the same line.