ARKET SEGMENTS AND TARGETS
C H A P T E R
After reading this chapter, students should:
Know what are the different levels of market segmentation
Know how a company can divide a market into segments
Know how a company should choose the most attractive target markets
Know what are the requirements for effective segmentation
Article I. Target marketing includes three activities: market segmentation, market
targeting, and market positioning.
We can target markets at four levels: segments, niches, local areas,
and individuals. Market segments are large, identifiable groups within a market. A
niche is a more narrowly defined group. Globalization and the Internet have made
niche marketing more feasible to many. Marketers appeal to local markets through
grassroots marketing for trading areas, neighborhoods, and even individual stores.
More companies now practice individual and mass customization.
The future is likely to see more self-marketing, a form of marketing in which
individual consumers take the initiative in designing products and brands.
There are two bases for segmenting consumer markets: consumer
characteristics and consumer responses. The major segmentation variables for
consumer markets are geographic, demographic, psychographic, and behavioral.
Marketers use them singly or in combination.
Business marketers use all these variables along with operating
variables, purchasing approaches, and situational factors.
To be useful, market segments must be measurable, substantial, accessible, differentiable,
A firm has to evaluate the various segments and decide how many and which ones to
target: a single segment, several segments, a specific product, a specific market, or the
full market. If it serves the full market, it must choose between differentiated and
undifferentiated marketing. Firms must also monitor segment relationships, and seek
economies of scope and the potential for marketing to super segments.
Marketers must develop segment-by-segment invasion plans and choose target markets in
a socially responsible manner at all times.