Marketing/Targeting & Segmentation

Marketing Book Sections

 Marketing  

 CH.1-Introduction  CH.2-Marketing Strategy  CH.3-Marketing Plan  CH.4-Targeting & Segmentation  

 CH.5-Consumer Behavior  CH.6-Product Development  CH.7-Market Research  CH.8-Marketing Ethics

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“

Did you ever see the customers in health-food stores? They are pale, skinny people who look half dead. In a steak house, you see robust, ruddy people. They're dying, of course, but they look terrific.

”

-Bill Cosby

Segmentation

The primary objective of segmentation is to identify specific customers with like attributes, and to find segments of customers that are attractive from a profit perspective.

Generic Markets (Large Segments)

comprised of groups of customers who have a general need

A generic market is comprised of groups of customers who have a general need, but have many offerings to choose from to meet that need. For example: transportation is a generic market that can be met by many offerings: car, bus, train, subway, taxi, etc.

Product Markets (Small Segments)

comprised of groups of customers who have a very specific need

A product market is comprised of groups of customers who have a very specific need, with fewer offerings to choose from. For example: The Luxury Car market has only a few options to choose from: Bentley, Aston Martin, Ferrari, etc. Product market segments are similar within the specific segment (ex. Luxury Cars), and are different across segments (ex. Luxury, Mid-size, Economy); and each segment has very specific characteristics, which, when reflected in the product, can return higher profits to the organization.

Markets can be segmented by defining the goals of the customers in that market subset. For example, in the transportation market(The Generic Market), a group of customers who's goals of transportation are to be able to travel in their own vehicle, feel comfortable/safe/fast relative to other transport options, and be able to show other people how "nice" their own vehicle is: this subset can be said to have goals which define them as a Luxury Car segment.

• Segment Dimensions = Impact on Marketing Mix Decisions
  • Demographics = Affects consumer needs
  • Geographic Location = Affects size of market
  • Behavior and Consumption Patterns = Affects product and promotion variables
  • Urgency of Satisfaction = Affects Place and Price variables

Targeting

identification of market segments and tailoring the marketing mix to meet segment needs

Target marketing is the identification of attractive market segments and tailoring the marketing mix to match the needs of target customers. This contrasts with mass marketing, whereby the marketing mix is vaguely aimed at all customers. A specific target market is a homogeneous group of customers to whom an organization wishes to appeal; it must be large enough to be profitable, and its members must have sufficient disposable income to spend on the goods, services, or ideas.

Positioning

what position does your product hold in the minds of your current and potential customers?

Positioning is the concept of defining what role the brand will play in enhancing customers' lives and then highlighting specific brand attributes to best match consumer needs.

• Ways to position:
  • Understand how customers perceive key dimensions of your brand, both tangible and intangible, relative to competitors' brands.
    • Price, Taste, Design and look of product are tangible benefits. Whereas feelings such as trust and confidence are intangible benefits products can have.
  • Understand which needs your target audience wishes to satisfy with your brand.
  • Position or reposition your brand to meet various target markets' needs, and manipulate the Four P's accordingly.

Segmentation in the Digital Economy

Information used to define segments of homogeneous consumers

Information is collected, aggregated, and used to define segments of homogeneous consumers. In providing targeted offerings to these consumers, several segmentation techniques are valuable:

• Database Management:Use third party database information to segment target markets according to a variety of meaningful variables.
• Anonymous Personalization:Segmenting a market based on anonymous consumer information .
• Permission Based marketing:Consumers provide meaningful information that is then used by the firm to supply targeted offerings to the consumer.

External Links

• Digital Economy: For additional information on the digital economy

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