Chapter 7 Summary: Identifying Market Segments and Targets

           All consumer markets are segmented based on four main areas: geographic, demographic, psychographic, and behavioral. It’s important for markets to be segmented so that a business knows how to target their specific market and also to determine if they want to market a product on a larger scope or be more specific.

           Geographic segmentation is pretty basic in that it breaks down markets based on location, whether it is nation or neighborhood. Geographic segmentation also takes in to account race and ethnicity. The first example that comes to mind is the Asian district in Oklahoma City. The restaurants and grocery stores all have an Asian influence, even in the architecture of the McDonald’s. The reason for this niche market is the densely populated area, predominately consisting of Asians.

            The next segmentation is demographic. Factors of this market segmentation include family size, gender, occupation, income, and generation. An example of a product or service in this category might be nursing homes for older generations or a specific tennis shoe for women, or health insurance that is the same price for a family unit, regardless of how many kids they have.

            The third market segment is psychographic, meaning “the science of using psychology and demographics to better understand consumers.” (Kolter 103). In this category, people are grouped into personality traits, lifestyles, and values. A target product for this market might be fictional books, non-fiction books, Bibles, magazines covering different subjects, etc.

           

        The fourth market segmentation is behavioral and this includes needs and benefits, decision roles, and user and usage. One example would be the use of occasions in purchases such as the need to purchase airfare for vacations. People typically buy Christmas decorations in December and graduation gifts in May. Targeting consumers with sales and coupons during these specific times will likely result in additional purchases because they are already thinking about buying these things during certain occasions.

          Knowing your segmented market and where your product falls into place is critical when developing a marketing plan. Understanding your consumer and their demographics, personality, and behavior will all attribute in the best way to market the product.

Source: Kotler, Philip, and Kevin Lane Keller. A Framework for Marketing Management. 5th ed. Boston: Prentice Hall, 2012.