5.5 Selecting Target Markets – Principles of Marketing

Demographic segmentation is effective because people who share each trait have things in common. The key difference between the two is that market segmentation divides the entire market, whereas customer segmentation only divides a brand's existing customer base. These smaller segments of consumers will share similar needs, interests, and characteristics.By targeting a smaller group of a large market, you can tap into customers who are more likely to pay for products that appeal directly to them. The more people you can target, the more chance you have at making money online, right? By segmenting the market the firm may then tailor sales campaigns and marketing strategy so as to be specifically aimed at the identified groupings.

The study of consumer personality and their values target segments in marketing and lifestyles Marketers might also segment using behavioral bases of segmentation, which relate to how people find, evaluate, acquire, use, and dispose a given product or service, as well as the reasons for acquiring them A unique configuration of groups emerging by applying one base of segmentation to a given market

While an advantage of geographic and demographic segmentation is that they are reasonably easy to define, a disadvantage is that they might hardly be related to consumer behavior at all. By completing trips and delivering superior service, Uber drivers can qualify for Blue, Gold, and Platinum tiers, offering an increasingly attractive array of benefits such as gas cashback. For instance, Uber, the ride-hailing service app, launched Uber Pro, a loyalty program that aimed to “offer competitive perks” for Uber drivers. Therefore, this initial market assessment can be adjusted to define a reachable market—the total number of consumers the store could potentially reach and serve feasibly. However, note that within this market, some consumers would simply not be reachable.

Examples of demographic segmentation.

A set of general criteria that marketers can use to segment a market, which can later be defined more specifically The total number of consumers the store could potentially reach and serve feasibly “Enhance your iPhone with a real keyboard.” Clicks.

Finally, the preceding examples illustrate that all three legs should be strong for the three-legged stool of market attractiveness to stand—if one is too small, by multiplying the three, the overall market potential will be low. To compute market potential, I personally opt for using a handy tool, which I’ve called “the three-legged stool”(or 3LS), to understand and compute market potential. However, consider the myriad examples of streetwear styles available, such as skatewear, techwear, athleisure, and even Harajuku. One naïve attempt might be to use age, and to then segment the market into (say), young, middle-aged, and older individuals.

• Marketers often start here to understand the scale and structure of their audience before layering on deeper behavioral or psychographic data.
• Learn why it matters and find examples of it in action to help you better understand how it works.
• Across categories, each example starts with a defined decision, blends multiple lenses, and validates results before scaling, turning segmentation into practical action on product, pricing, and go-to-market.
• This guide provides examples of target markets, explains differences between target markets and audiences, and outlines various marketing strategies.

How to get started with segmentation

The information below includes the information needed to generate citations in most major styles (APA, MLA, etc.); you must reformat and organize the information as needed to fit the requirements of the style. Refer to the Answer Key at the end of the book for feedback. Watch these videos to learn about the typical marketing analyst job description and how to become one. For instance, Procter & Gamble sells several different types of laundry detergent, such as Tide, Gain, and Cheer. It’s not uncommon for companies to develop products that compete against their own offerings as long as the new products offer different perceived benefits to consumers.

This radius would delineate the store’s market, defined as the total number of consumers that an organization could potentially serve. Before defining what market segmentation is, we must first understand what a market is. A deep dive into market segmentation — learn how you can improve your marketing ROI with tailored messaging to targeted groups. By targeting these specific segments, companies can tailor their marketing efforts for maximum impact, leading to a better ROI.