Market segmentation allows a company to target its products or services to a specific group of consumers, thus avoiding the cost of advertising and distributing to a mass market. A disadvantage of segmentation is that it sacrifices economies of scale in production, distribution and communication, according to NetMBA. Segmentation is effective for small businesses that match marketing strategies with core customers, according to the Houston Chronicle.Know More
Some examples of market segments are geographic, demographic, psychographic and behavioralistic groups, according to NetMBA. A geographic segment can be defined by its location or population density, such as urban vs. rural. Demographic segments include baby boomers or highly educated customers. Psychographic segments are divided by activities or interests. Behavioralistic variables include brand loyalty and first-time buyers.
Businesses focused on targeted marketing can overlook other potential customers, the Houston Chronicle points out, such as a cereal company that advertises exclusively to children and neglects a larger group of potential adult consumers. Some market segments are identified by common traits, such as double-income, no kids, or DINK households, according to NetMBA. Segmentation can also be exploitative, as in cases where a fast-food company deliberately targets low-income families unable to afford a nutritional diet, notes the Houston Chronicle.Learn more about Marketing & Sales
Sephora's general target market is higher-income women, but the stores are cleverly designed to break down the target market into smaller segments. Sephora tries to appeal to women who value quality and are willing to pay for it.Full Answer >
The target market profile groups that Gatorade focuses on are athletes and teenagers. Gatorade is designed for athletes because it replenishes the body with electrolytes and carbohydrates before, during and after an intense workout.Full Answer >
According to MyersBizNet, Pepsi-Cola's target market is young consumers, including those between 18 to 22 years of age. The assumption is that reaching new market segments is easier because young shoppers have not yet formed brand loyalty.Full Answer >
Starbucks' target market is urban professional men and women between the ages of 25 and 40. This market segment is characterized by fairly high incomes, professional careers and a concern for social welfare. This demographic accounts for approximately 49 percent of Starbucks' total business as of 2015.Full Answer >