2017-11-30
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CHAPTER 4
SEGMENTATION AND DEMOGRAPHICS
CHAPTER 4 GOALS
This is the first of three chapters on target markets - the ultimate consumers and business users. In it we consider the selection of target markets and the strategic concept of market segmentation and discuss the demographic and buying-power bases for segmenting consumer and business markets. After studying this chapter, you should be able to explain:
• Fundamentals of target-market selection.
• The concept of market segmentation—its meaning, benefits, limitations, and conditions for use.
• The difference between ultimate consumer markets and business user markets.
• Bases for segmenting consumer markets.
• Segmentation implications in the distribution and composition of population.
• Segmentation implications in consumer income distribution and spending patterns.
• Bases for segmenting business markets.
• Target-market strategies- aggregation, concentration, and multiple segmentation.
Тhe promotional program for Viadent toothpaste is targeted at people who want to control tartar arid plaque on their teeth. What's Left, a mail-order firm near Philadelphia, offers products designed for left-handed people—scissors, can openers, bread knives, rulers (numbered from right to left), measuring cups, potato peelers, and others
As the number of college-age people declines, many universities are aiming their educational services at older people who did not attend college in their earlier years and at executives interested in confinuihg education. Several hotel chains try to attract the family trade by not charging for children under 11 who occupy a room with their parents.
Canon, a Japanese firm, entered the American market with a simplified, low-cost, desktop copying machine targeted at markets that previously had been ignored by producers of large, floor-type copiers. Several manufacturers of small computers have designed laptop models especially for sales people and other business people who travel.
Campbell Soup introduced a line of food products under the Casera label for Hispanic markets. In Texas and California, Campbell markets a nacho cheese soup that is spicier than the same soup sold in other parts of the country. San Francisco TV station KTSF runs programs in Filipino, Vietnamese, and other Asian languages.
For several decades Lane Bryant stores have specialized in apparel for women who wear size 14 or larger. Now many other stores specialize in apparel for large women or at least have one full department catering to this market. On the other hand, stores such as Petite and Short Stuff stock a wide range of fashion apparel for women who wear size 5, 3, or smaller.
Target markets for The American Cancer Society's "no smoking" campaign include teenagers (urge them not to start smoking), longtime smokers (get them to quit), and legislatures (gef them to further restrict advertising of tobacco products and to establish "no smoking" areas).
The common thread in all of these situations is that each organization adopted a strategy of market segmentation as part of its target market selectionя. Strategic planning was defined in Chapter 1 as the matching of an organization's resources with its market opportunities. In this chapter we discuss market opportunities, focusing on the selection of target markets and decisions regarding market segmentation. The segmentation discussion will include a consideration of the geographic-demographic and buying-power dimensions of target markets.
SELECTING A TARGET MARKET
In Chapter 1 we defined a market as people or organizations with wants (needs) to satisfy, money to spend, and the willingness to spend it. A target market is a group of customers (people or firms) at whom the seller specifically aims its marketing efforts. The careful selection and accurate definition (identification) of target markets are essential for the development of an effective marketing mix.
