1. Market segmentation is the selection of groups of people who will be most receptive to a product. The most frequent methods of segmenting include:
Demographic variables such as: age, sex, race, income, occupation, education and household status.
Psychographic variables such as: lifestyle, activities, personality and social class.
Behavioural variables such as: product benefits and product use patterns.
Geographic variables such as: climate, country or region and the size of the area in terms of people that live in it.
Much segmentation involves a combination of these methods.
Nike as a company used to be a very production focused company, that is, it focused on having a competitive advantage through inexpensive production and technologically superior product design. Most recently however Nike has opted to become a customer oriented company and that is to create products that Nike's customers truly value. To do so it has had to do extensive research on all of its target segments in order to find out what each segment wanted out of the product.
As Nike is a global company it has really focused on the demographic, psychographic and behavioural segmentation.
At the top of Nike's customer list are professional athletes. They are usually fairly young people with very high incomes who are single or in the early stages of marriage. These athletes who are the best at their respective sports such as running, tennis or basketball demand the highest quality shoe with specific characteristics to suit their sport and they use the shoe virtually everyday. Such athletes also have absolute brand loyalty as they are often sponsored by the company and given all the shoes for free. The very best athletes such as Michael Jordan and Tiger Woods have even had their own signature models designed with everything from sole to colour and pattern...