Target Marketing involves breaking a market into segments and then concentrating

Posted: September 20th, 2023

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small business’s success.
There are four methods of dividing the market:
Demographic segmentation – based on measurable statistics, age, race, sex, religion, ethnicity
Geographic segmentation – based on location
Psychographic segmentation – based on lifestyle preferences and their attitudes, interests, desires
Behavioristic segmentation – based on values and beliefs as well as desired benefits
Variables for Segmenting Consumer Markets
Demographic Variables
Demographic characteristics that marketers commonly use in segmenting markets include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class. Marketers rely on these demographic characteristics because they are often closely linked to customers’ needs and purchasing behavior and can be readily measured.
Marketers need to be aware of age distribution and how that distribution is changing; children in particular have greater influence over spending patterns.
Gender is another demographic variable commonly used to segment markets, including the markets for clothing, soft drinks, nonprescription medications, toiletries, magazines, and even cigarettes.
Marketers also use race and ethnicity as variables for segmenting markets for such products as food, music, clothing, and cosmetics and for services such as banking and insurance.
Income affects people’s ability to buy and their desires for certain lifestyles.
Marital status and the presence and age of children—characteristics often combined and called the family life cycle—affect needs for housing, appliances, food and beverages, automobiles, and recreational equipment.
The composition of the American household in relation to the family life cycle has changed considerably over the last several decades, meaning that the “typical” family no longer consists of a married couple with children.
Marketers also use many other demographic variables, including education level and occupation.
Tracking these changes helps marketers satisfy the needs of particular target markets through new marketing mixes.
Geographic Variables
Geographic variables include climate, terrain, city size, population density, and urban/rural areas—also influence consumer product needs. Markets may be divided into regions because one or more geographic variables can cause customers to differ from one region to another.
Some marketers focus efforts on cities of a certain size.
The U.S. Census Bureau developed a system to classify metropolitan areas (any area with a city or urbanized area with a population of at least 50,000 and a total metropolitan population of at least 100,000).
A metropolitan statistical area (MSA) is an urbanized area encircled by nonmetropolitan counties and is neither socially nor economically dependent on any other metropolitan area.
A metropolitan area within a complex of at least 1 million inhabitants can elect to be named a primary metropolitan statistical area (PMSA).
A consolidated metropolitan statistical area (CMSA) is a metropolitan area of at least 1 million consisting of two or more PMSAs.
Market density refers to the number of potential customers within a unit of land area, such as a square mile.
Geodemographic segmentation clusters people in zip code areas and even smaller neighborhood units based on lifestyle and demographic information.
Micromarketing focuses precise marketing efforts on very small geographic markets, such as community, and even neighborhood markets.
Psychographic Variables
A psychographic variable can be used by itself to segment a market or combined with other types of segmentation variables. The following are the types most commonly used to segment markets.
Personality characteristics
These can be useful for segmentation when a product resembles many competing products and consumers’ needs are not greatly affected by other segmentation variables. Marketers almost always select personality characteristics that many people view positively.
Motives
A market is divided according to consumers’ reasons for making a purchase.
Personal appearance, affiliation, status, safety, and health are examples of motives affecting the types of products purchased and the choice of stores in which they are bought.
Lifestyle segmentation
Lifestyle segmentation groups individuals according to how they spend their time, importance of things in their surroundings, beliefs about themselves and broad issues, and some demographic characteristics. This variable encompasses numerous characteristics related to people’s activities, interests, and opinions.
One of the more popular programs that studies lifestyle is conducted by the Stanford Research Institute’s Value and Lifestyle Program (VALS), which classifies consumers into eight basic groups based on psychological characteristics that are correlated with purchase behavior and four key demographics: Innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, and Survivors.
Behavioristic Variables
Firms can divide a market according to some feature of consumer behavior toward a product, commonly involving some aspect of product use. How consumers use or apply the products may also determine segmentation.
Benefit segmentation is the division of a market according to benefits that consumers want from the product. The effectiveness of benefit segmentation depends on three conditions:
The benefits sought must be identifiable.
Using these benefits, marketers must be able to divide people into recognizable segments.
One or more of the resulting segments must be accessible to the firm’s marketing efforts.
Variables for Segmenting Business Markets
Geographic Location. Variations in organizations’ demands result from differences in climate, terrain, consumer preferences, or similar factors.
Type of Organization. Required product features, distribution systems, price structures, and selling strategies may vary among different types of organizations.
Customer Size. An organization’s size may affect the purchasing procedures and types and quantities of products desired.
Product Use. How a firm uses products affects the types and amounts of products purchased and the manner in which they are purchased.
Instructions
For this assignment, you will complete a write-up on your market within 1-2 pages. You need to include specific information about:
your market’s demographics,
your market’s psychographics, and
information on consumer behavior in your market.
This data may come from observations and specific research you conduct within the Bureau of Labor and Statistics to get your demographic data. Let me know if you have any questions.