Segmentation and Targeting: Segmentation and Targeting

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OpenStax — Principles of Marketing

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Segmentation Dividing a market into groups with shared needs or characteristics.

Targeting Selecting which segment(s) to focus marketing efforts on.

Definition The most narrowly focused targeting strategy. Targets individuals (individual marketing) or very small localized groups

Tactics National TV, radio, print campaigns; nationally distributed coupons; point-of-purchase displays.

Best for Widely consumed commodity items — toothpaste, gasoline, white bread — where the product is nearly identical across segme

Advantage Gives customers exactly what they want. High relevance.

Disadvantage Achieving scale with highly individualized offers requires sophisticated production or distribution systems. Cost per cu

Example application A consumer goods company segments by gender and develops separate products with separate marketing plans for each — diff

Segment targeted Women seeking serious long-term relationships.

Result 35.3% U.S. energy drink market share in 2019; $1.06 billion in U.S.

Mass marketing One product, one message, one mix for the entire market. Also called undifferentiated marketing.

Differentiated marketing Separate offers and marketing plans for multiple segments. Also called multisegment marketing.

Niche marketing Deep focus on one or a few narrowly defined segments. Also called concentrated marketing.

Micromarketing Targeting individuals or small local groups. Includes individual marketing (mass customization) and local marketing.

Marketing mix The combination of product, promotion, place, and price designed for a specific target segment.