Target Market - Market Segmentations

Market Segmentations

Target markets are groups of individuals that are separated by distinguishable and noticeable aspects. Target markets can be separated by the following aspects:

• Geographic segmentations, addresses (their location climate region)

• demographic/socioeconomic segmentation (gender, age, income, occupation, education, household size, and stage in the family life cycle)

• psychographic segmentation (similar attitudes, values, and lifestyles)

• behavioral segmentation (occasions, degree of loyalty)

• product-related segmentation (relationship to a product)

In addition to the above segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better defined target groups. A seven step approach proposed by Roger Best is as follows:

• Select the target audience– the customers are grouped based on similar needs and benefits sought by them on purchase of a product.

• Identify clusters of similar needs- demographics, lifestyle, usage behaviour and pattern used to differentiate between segments.

• Apply a valuation approach- market growth, barriers to entry, market access, switching, etc. are used.

• Test the segments- A segment storyboard is to be created to test the attractiveness of each segment’s positioning strategy.

• Modify marketing mix- expanding segment positioning strategy to include all aspects of marketing mix.