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Research Guides

MKTG 321 Principles of Marketing (Spring 2024)

Market Segmentation & Size

Finding the market segment and market size is a three step process:

  1. Industry: Review your industry research, which might have some information about key consumers and this could potentially be your market segment. Review the "Industry & Competition" page (see tab on the left). 
  2. Market Segment: Define who your potential buyers are, also known as the market segment. For example, women with children under 18, college students, etc. Gather demographic, behavior, and psychographic information on your market segment.
  3. Market Size: Research demographic statistics to find the population number of your segment. For example, if the market segment is U.S. college students, the market size is 20 million as research shows there are 20 million college students in the U.S.

You are not limited to only using the resources in each section. The market segments and sizes are closely linked. If you're working on the market segment, you might find resources in the market size helpful, and vice versa.

Market Segmentation

Using SRDS for Segmentation 
Helpful tutorial from Claritas on MyBestSegments demo
Description of all 68 Claritas segments

Where to find each report type

  • Consumer Concentration: Reports → Standard Reports → Demographic Reports → Consumer Concentration
  • Market Potential: Reports → Segmentation Reports → Lifestyler Reports → Market Potential
  • Profile Ranking Index: Reports → Segmentation Reports → Profiler Reports → Profile Ranking Index
  • Profile Worksheet: Reports → Segmentation Reports → Profiler Reports → Profile Worksheet
  • Segment Distribution: Reports → Segmentation Reports → Market Overview Reports → Segment Distribution
  • Target Concentration: Reports → Segmentation Reports → Locator Reports → Target Concentration
  • Target Segment Measure: Reports → Segmentation Reports → Lifestyler Reports → Target Segment Measure

Using SimplyAnalytics for Segmentation
Helpful tutorial from Purdue on using SA. Another helpful tutorial from Miami University. Skip to :30 on both to avoid university-specific info. 
Simply Analytics is helpful for many different situations. How to access Simmons Market Segments: under 'Data,' then 'Market Segments.' At the bottom of the selection pane is 'Simmons.' You can overlay these segments on map sections and business locations.

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Example from Mintel Reports
"I want to know how successful I'd be at marketing through influencers to Gen Z. How much do they trust online influencers?" 
"Which of these people do you think are trustworthy? Please select all that apply." Base: 1,000 internet users aged 13-17
Sample 999
My parents  94%
Online influencers 15%
Celebrities 9%
Elected officials 6%
None of these 3%

Market Size Estimation

The more specific your target audience is, the harder it is to find an accurate number. For example, finding the number of college students who live in dorms in the east coast is harder to find than college students in the U.S.

Example using data from IBISWorld USA, Statista, and Data USA. 

Question: What is the market for dog walking services in College Station, TX?

  • Total Available Market (TAM) = All households (HH) in College Station with a dog X Yearly household expenditure of dog walking services/HH
  • Using the IBISWorld USA report on Dog Walking Services, you find that the average walk costs $20. 
  • If you estimate that working adults need this service 5 days a week, you come to the conclusion that each family would spend $100/week, or a potential $5,200/year. 
  • Therefore, the TAM would be $5,200 X all HH in College Station with a dog. 
  • A Statista report tells us that 68% of HH in the US have pets. It also tells us that of those HH, 71% have a dog.\
  • Information from Data USA tells us there are 38,020 HH in College Station.
  • With these numbers, we find 38,020 X 68% = 25,853 pet owners. Of these pet owners, 71% own a dog = 18,355. The yearly expenditure of $5,200 X 18,355 HH with a dog gives us = $95m TAM. 

What are the next steps on answering this question? Perhaps you would target areas based on higher incomes, or areas based on age ranges.

Consumers & Where They Shop

There are several ways to investigate where your target consumers are shopping. One way is to use Statista.
You can search by topic, consumer good or 'physical store,' for example. undefined

Resources

Trade organization websites and publications

Trade publications can give you an idea as to who an industry's customers are and their needs. For example, if doing research on the cosmetic and nails industry, review NAILS Magazine. To find trade publications, Google your industry with keywords like "trade organization" or "trade associations".

Subjects: Business, Marketing