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MarketSegmentationandTargetingMarketSegmentationMarketscanbehugeanddiverseentitiesmadeupofindividuals.Sin

ceindividualwantsandneedstendtodiffer,tryingtomassmarkettoawholemarketoftenisinefficient.Costingtoomuchtimeandmoney,andhurtingprofitpot

ential.Therefore,acompanyshouldfocusortargetspecificgroupsorsegmentsofindividualstoenhanceprofitopportunities.Market

SegmentationSomewillarguethatmassmarketingisbetter,becauseloweroverallproductioncostsareachieved.Lowe

rexpensesthenleadstohigherprofits.However,unlessalmosteveryoneisbuyingyourproduct/service,thelowerexpenseswillnotnecessarym

eanhigherprofits.MarketSegmentationAsamarketer,definingandidentifyinggroupsofindividualswhowillpayfor

yourproductorserviceisanimportanttask.Thinkofthistaskastryingtotakeadvantageofthecostsavingsofmassmarketing,butonasmallerscale.Or,co

nductingmassmarketingtogroupsinsteadofthemarketasawhole.MarketSegmentationDefinition:Amarketsegmentsaregroupsofhigh-p

otentialprospectivecustomerswithcommoncharacteristicsandneedsthatdistinguishthemfromotherhigh-potentialmarketsegments.MarketSegmen

tationTypesofSegmentation:•Segment(general):focusesoncustomerswhoshareasimilarsetofwants.•Niche:focusesoncustomerswhoseekadis

tinctsetofbenefits(oftencalledsub-segmentation).•Local:focusesonthewantsofcustomersinaspecificlocation.•Customerization:foc

usesoncustomizingtheproductorservicetofitthecustomer’sspecificwants(theultimateinsegmentation).MarketSegmentationBasesforSegmentingCustomerMar

kets:•Geographic•Demographic•Psychographic•BehavioralMarketSegmentationGeographicSegmentation:Thisbasisforsegmentationcallsfordividingthe

marketintodifferentgeographicunits(i.e.provinces,counties,cities,towns,neighborhoods,etc.).MarketSegmentationDemographicSegmentation:Th

isbasisofsegmentationcallsfordividingthemarketsintogroupsbasedonageand/orothervariables.Demographicsegmentationispopular

,becausethevariablesareeasiertomeasre.MarketSegmentationSomeofthevariablesconsideredinDemographicSegmentation:•Ageandlife-cyclesta

ge•Lifestage•Gender•Income•Socialclass•Generation•EthnicityMarketSegmentationPsychographicSegmentation:Thisbas

isofsegmentationgroupspotentialcustomersaccordingtopsychological/personalitytraits,lifestyles,orvalues.MarketSegmentationBehavioralSeg

mentation:Thisbasisofsegmentationdividescustomersintogroupsaccordingtotheirknowledgeof,attitudetoward,useof,orrespon

setoaproductorservice.MarketSegmentationVariablesconsideredinBehavioralSegmentation:•Occasions(need/use)•Benefits•Use

rStatus•UsageRate•Buyer-readinessstage•Loyaltystatus•AttitudeMarketSegmentationIntheend,therearemanydifferentwaystosegmen

tamarket.Howyousegmentthemarketisyourdecision!Alwayskeepyourproductorserviceinmindwhenyousegment,orelseyourse

gmentationactivitieswillbeawasteoftimeandmoney.MarketTargetingAfteryouhaveidentifiedthepossiblemarketsegments

andopportunities,whichsegmentsandhowmanysegmentstotargetorfocusonisyournextstep.MarketTargetingEffectiveSegmentationCriteria:Tobeusefulinyourm

arketingefforts,marketsegmentsmustratefavorablyonfivekeycriteria.Thesegmentsmustbe:•Measurable•Subst

antial•Accessible•Differentiable•ActionableMarketTargetingWhenevaluatingdifferentmarketsegments,twofactorsmustbeconsidered:•Thesegment’s

overallattractiveness•Thecompany’sobjectivesandresourcesMarketTargetingTypesofTargetingDecisions:•Single-segmentconcentration•Selecti

vespecialization•Productspecialization•Marketspecialization•FullmarketcoverageMarketTargetingSingle-segmentconcentra

tiontargeting:Thischoiceinvolvesconcentratedmarketing.Thecompanygainsathoroughunderstandingofthechosensegment’sneedsandach

ievesastrongmarketpresence(i.e.mostluxurygoods).MarketTargetingSelectivespecializationtargeting:Anumberofsegmentsareselected,eachobjective

lyattractiveandappropriate.Littleornosynergymayexistamongthesegments,buteachsegmentpromisestomakemoneyforthecompany(i.e.carmanufact

urers).MarketTargetingProductspecializationtargeting:Underthisarrangement,thecompanyspecializesinmaki

ngacertainproductforseveralsegments.Theproductmightbefurtherspecializedforeachsegment(i.e.TexasInstrumentcalculators).Theriskiste

chnologicalchangemightendtheneedfortheproduct.MarketTargetingMarketspecializationtargeting:Focusisonservingtheneedsofaparticularc

ustomergroup(i.e.defensecontractors).Therisksarebudgetcutsandgroupshrinkage.MarketTargetingFullmarket

coveragetargeting:Aattemptismadetoserveallcustomergroupswithalltheproductstheymightneed.Onlyafewlargecompaniescanemploythistargetingmethodeffectiv

ely,butsometimeeventheyfail.MarketTargetingFullmarketcoveragetargeting:UndifferentiatedversusdifferentiatedmarketingU

ndifferentiated:ignoressegmentdifferencesandoffersonlyoneproductDifferentiated:operatesinseveralsegmentandoffers

differentproductsforeachSalestendtobehigherfordifferentiatedmarketing,butsoarecosts.MarketTargetingAdditionalconsiderations:

Segment-by-segmentinvasions:enteringonesegmentatatimeandavoidinglettingrivalsknowwhichsegmentisnext,goodplanningrequired.U

pdatingsegmentationarrangements:segmentationanalysisneedstobeonaregularbasis.Ethicalchoiceoftargetmarkets:sometimesachoicecancausecontroversy

,consumerscanbeconcernedifvulnerablegroupsaretakenadvantageoforpotentiallyharmfulproductsarepromoted.