TARGET MARKETING

A target market is a set of buyers sharing common needs
or characteristics that a company decides to serve. A company
identifies a target market in order to organize its
tasks and cope with the particular demands of the marketplace.
Target marketing forms the foundation of a modern
marketing strategy because doing it well helps a company
be more efficient and effective by focusing on a certain
segment of its market that it can best satisfy.
Targeting also benefits consumers because a company
can reach specific groups of consumers with offers carefully
tailored to satisfy their needs. To do so, a company
has to evaluate the various segments and decide how
many, and which ones, to target. There is no single way to
segment a market. A company needs to research different
segmentation variables alone and in combination with
others to find its target market. Four main variables can be
used in segmenting consumer markets: geographic, demographic,
psychographic, and behavioral segmentation.
GEOGRAPHIC SEGMENTATION
Geographic segmentation calls for dividing the market
into different geographic units, such as nations, regions,
states, counties, cities, or neighborhoods. Many companies
localize their products as well as their advertising,
promotion, and sales efforts to fit the needs of individual
cities, regions, and neighborhoods. For example, clothing
stores sell clothes targeted to their geographic markets. In
January, the Gap clothing store sells winter clothing in
Portland, Maine, such as mittens, scarves, and winter
jackets. A Gap located in Clearwater, Florida, will sell
more T-shirts, shorts, and bathing suits.
DEMOGRAPHIC SEGMENTATION
Demographic segmentation divides the market into
groups based on such variables as age, gender, family size,
family life cycle, income, occupation, education, religion,
race, and nationality. Demographics is the most popular
basis for segmenting customer groups because consumer
needs, wants, and usage rates often closely reflect demographic
variables. Even when a market segment is first
defined using other factors, such as psychographic or geographic
segmentation, demographic characteristics must
be known in order to assess the size of the target market
and to reach it efficiently.
Demographics is also the easiest and least expensive
to retrieve because it is secondary data; that is, it comes
from research that has already been conducted. For example,
a target market for a real estate developer selling luxury
vacation homes near Walt Disney World would
include professional married couples approximately 30- to
45-years-old with young children, and with incomes of
more than $100,000. Another example of targeting
through demographics is Liz Claiborne Apparel Company.
They have named their target market; her name is
Liz Lady. They know Liz Lady’s age, income range, professional
status, family status, hobbies, and interests. Every
decision from marketing to design is based on Liz Lady’s
profile.
PSYCHOGRAPHIC SEGMENTATION
Psychographic segmentation is the process of dividing
markets into groups based on values, social class, lifestyle,
or personality characteristics. Individuals in the same
demographic group may fall into very different psychoeobf_

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graphic segments. Psychographic segmentation involves
qualitative aspects—the “why” component of consumer
buying patterns. Therefore, a company must conduct its
own research, which can become very time-consuming
and expensive.
Marketers, however, are increasingly focusing on psychographic
characteristics. An example of psychographic
segmentation is that of the clothing retailer Abercrombie
and Fitch. Abercrombie and Fitch has developed a powerful
personality that is fun-loving, independent, and sexually
uninhibited—a winning formula with teenagers and
college students. To remain familiar with teen tastes and
to spark ideas for new merchandise, Abercrombie and
Fitch sends about thirty staffers to college campuses each
month to chat with students about what they play, wear,
listen to, and read. This kind of research led to success in
the early twenty-first century with wind pants. (These
resemble track-and-field pants but are generally made of
nylon.) The stores themselves, featuring comfortable armchairs,
are designed to be gathering places. They are
staffed by high-energy “brand reps” recruited from local
campuses and dressed in Abercrombie and Fitch clothes.
BEHAVIORAL SEGMENTATION
Behavioral segmentation divides a market into groups
based on consumer knowledge, attitude, use, or response
to a product. Many marketers believe that behavior variables
are the best starting points for building market segments.
Why does one consumer drink Coke, another
Pepsi, and a third iced tea? Demographics and psychographics
can provide many clues, but it is often helpful to
consider additional factors as well. Individuals act differently
depending on their situation or the occasion for
using the product. For example, a woman who shops only
at discount stores for clothing may nonetheless think
nothing of spending $100 on a bathing suit at a specialty
shop for her Caribbean vacation. Some holidays, such as
Father’s Day and Mother’s Day, were originally promoted
partly to increase the sale of flowers, candy, cards, and
other gifts. Many food marketers prepare special offers
and ads for holidays. For example, Beatrice Foods runs
special Thanksgiving and Christmas ads for Reddi-whip
in November and December, months that account for 30
percent of all sales of whipped cream.
SELECTING A TARGET MARKET
Identifying a target market allows marketers to develop
strategies for designing, pricing, distributing, promoting,
positioning, and improving their product, service, or idea.
For example, if research shows that a sturdy recyclable
package with blue lettering appeals to one’s target market
and if one is focused on that target market, that type of
packaging should be chosen. If, however, marketers are
product or profit oriented—rather than people oriented—
they might simply make the package out of plain
Styrofoam because it protects the product (product oriented)
or because it is less expensive (profit oriented). If
one knows one’s target market is 24- to 49-year-old men
who like rhythm and blues, are frequent CD buyers, and
live in urban neighborhoods, one can create an advertising
message to appeal to those types of buyers. Additionally,
marketers could buy spots on a specific radio station or
television show that appeal to this type of buyer, rather
than buying general media time to cover all the bases.
Many variables can be used to segment and select a
target market. Practically any variable—such as age, sex,
product usage, lifestyle, or desired benefit—can be used to
describe a target market. The number of target markets
identified also depends on a marketing strategist’s ability
to be creative in identifying segments. Target marketing is
especially important for specialty products and shops. Target
marketing rests on the assumption that differences
among customers are related to differences in the purchasing
behavior.