Segmenting & Targeting

Identifying Market
Segments and Target

Segmentation Targeting Positioning
S T P
Why?
Effective target marketing requires that marketers:
S T P
- Identify and profile distinct groups of buyers
Companies cannot who differ in their needs and wants (market
connect with all segmentation).
customers in large,
broad, or diverse - Select one or more market segments to enter
markets. (market targeting).
- For each target segment, establish and

communicate the distinctive benefit(s) of the
company’s market offering (market positioning).
Market Segmentation
The process of defining and subdividing a

large market into clearly identifiable
segments having similar needs, wants,
or demand characteristics.
Demographic Segmentation
Dividing the market on variables such as

age, family size, family life cycle, gender,
income, occupation, education, religion,
race, generation, nationality, and social
class.
Age and life-cycle stage
Consumer wants and abilities change

with age.
Nevertheless, age and life cycle can be

tricky variables
Life stage
Defines a person’s major concern, such as

going through a divorce, going into a
second marriage, taking care of an older
parent, person, deciding to buy a new
home, and so on.
Present opportunities for marketers!

Gender
Men and women have different attitudes and
behave differently.
Women tend to be more communal-minded

and men more self-expressive and goal-
directed!
Men often like to read product information;

women may relate to a product on a more
personal level.
Income
Long-standing practice in such

categories as automobiles, clothing,
cosmetics, financial services, and travel.
Generation
Each generation or cohort is profoundly

influenced by the times in which it grows
up—the music, movies, politics, and
defining events of that period.
Members share the same major cultural,

political, and economic experiences and
have similar outlooks and values.
Generation: Categories
Generation: Categories
Generation:
Baby boomers are driven by a mantra in many cases!
“Fifty is the new thirty.”

Race and culture:
Multicultural marketing is an approach

recognizing that different ethnic and
cultural segments have sufficiently
different needs.
Read:
https://www.forbes.com/sites/pamdanziger/2022/09/
22/hispanic-americans-are-rapidly-accumulating-
wealth-and-what-it-means-for-brands/
Psychographic Segmentation
Dividing buyers into different groups on

the basis of psychological/personality
traits, lifestyle, or values.
People within the same demographic

group can exhibit very different
psychographic profiles.
VALS (an acronym for “values and

lifestyles”) is the most popular
segmentation system combining
lifestyles and values.
Behavioral segmentation
Dividing buyers into groups on the

basis of their knowledge of,
attitude toward, use of, or
response to a product.
USER AND USAGE
• Occasions – A time of day, week, month, year,

or other well-defined temporal aspects of a
consumer’s life.
• User Status: Potential users, nonusers, ex-

users, regulars, first-timers, or users of
competitors’ products.
• Usage Rate: Heavy, medium, light, or nonuser.

• User and usage
➢ Hard-core loyals—Consumers who buy

only one brand all the time.
➢ Split loyals—Consumers who are loyal to

two or three brands.
➢ Shifting loyals—Consumers who shift

loyalty from one brand to another.
➢ Switchers—Consumers who show no

loyalty to any brand.
Loyalty Status
• Buyer-Readiness Stage: Some

people are unaware of the product,
some are aware, some are informed,
some are interested, some desire the
product, and some intend to buy.
Use of marketing funnel

Effective Segmentation Criteria
•Measurable
•Substantial
•Accessible
•Differentiable
•Actionable
Market Targeting
Target Marketing involves breaking a

market into segments and then
concentrating your marketing efforts
on one or a few key segments.
Market Targeting- factors to be considered
Porter’s Five Force
Substitute Buyer
Products Power
Supplier
New Power
Entrants
Rivals
Levels of Segmenting &
Targeting
Evaluating and Selecting Segments/Target Marketing Strategy
Multiple segment
specialization
Full market coverage
Single-segment
concentration Individual
marketing

Segmenting & Targeting

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Segmenting & Targeting

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Identifying Market

Segments and Target

Effective target marketing requires that marketers:

- For each target segment, establish and

The process of defining and subdividing a

Dividing the market on variables such as

Age and life-cycle stage

Consumer wants and abilities change

Nevertheless, age and life cycle can be

Defines a person’s major concern, such as

Present opportunities for marketers!

Women tend to be more communal-minded

Men often like to read product information;

Long-standing practice in such

Each generation or cohort is profoundly

Members share the same major cultural,

Baby boomers are driven by a mantra in many cases!

“Fifty is the new thirty.”

Race and culture:

Multicultural marketing is an approach

Dividing buyers into different groups on

People within the same demographic

VALS (an acronym for “values and

Dividing buyers into groups on the

USER AND USAGE

• Occasions – A time of day, week, month, year,

• User Status: Potential users, nonusers, ex-

• Usage Rate: Heavy, medium, light, or nonuser.

• User and usage

➢ Hard-core loyals—Consumers who buy

➢ Split loyals—Consumers who are loyal to

➢ Shifting loyals—Consumers who shift

➢ Switchers—Consumers who show no

• Buyer-Readiness Stage: Some

Use of marketing funnel

Target Marketing involves breaking a

Porter’s Five Force

Full market coverage

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