Vals segmentation

Target Markets

YO U W I L L L E A R N

To explain the purpose of market segmentation.

To identify the methods used to segment markets.

To explain product positioning.

W H Y I T ’ S I M P O R TA N T

Understanding how to segment markets and position products in the minds of consumers is critical for successful marketing.

K E Y T E R M S

market segmentation

psychographics

geographics

behavioristics

positioning

competitive advantage

Describe why it might be important to segment markets.

market segmentation a way of analyzing a market by specific characteristics to create a target market

The Importance of Market Segmentation

Market segmentation is a way of analyzing a market by spe-cific characteristics to create a target market. As you learned in Chapter 1, market segments are groups of consumers categorized by those characteristics because a group may have similar needs and wants. Researchers can use different characteristics, such as age, in-come, ethnic background, gender, education, and marital status, to seg-ment a target market of consumers. The goal of any segmentation strategy is to understand the different markets and the unique needs and wants within each market. No particular strategy works better than another strategy. In fact, by using a number of market-segmentation strategies, marketers can get a more precise picture of the buying

behavior of each group.

Some of the typical market segments are based on demographics, psy-chographics, geographics, behavioristics, and frequency of product use.

Demographic Segmentation

As discussed in Chapter 8, demographics are statistics that describe a population in terms of personal characteristics, such as age, gender, income, ethnicity, or education. Using demographics is one of the most common ways of segmenting customer groups because demographic characteristics are objective and easy to measure. Most local, state, and national governments take routine census surveys that reveal the size and makeup of its residents. The survey results are available to anyone, including marketers.

AGE GROUPS Knowing the size of a particular age group within a society can be useful for product planning because the needs and wants of customers are often age specific. For example, think about what is important to teenagers. The needs and wants of teens are not the same as those for senior citizens. Marketing campaigns by McDonald’s for teens differ from campaigns designed for senior citizens.

INCOME People with similar income levels sometimes have similar needs and wants. For example, a company offering vacation homes and pleasure boats would not market to a target market with low income.

GENDER Another demographic factor is gender. Besides differences in preferences for clothing and toiletries, men and women have dis-tinctly different buying behaviors. In recent years, hotel operators have noticed an increase in the number of female business travelers. They responded to this demographic shift by focusing on women’s needs when planning new properties or remodeling old facilities.

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9. Market Information and

© The McGraw−Hill

Hospitality and Tourism

and Tourism

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Psychographic Segmentation

Psychographics are studies of consumers based on social and psy-chological characteristics, such as attitudes, interests, and opinions. In Chapter 2, you learned about Plog’s theory of psychographics as it related to people’s choices in travel destinations. In marketing, psy-chographics refer to how people spend their leisure time, the way they live, and their personal preferences—all of which define their lifestyles. Lifestyle preferences are determined by activities people pursue, what is important to them, and how they feel about themselves and the world. For example, psychographic segmentation can be used to identify people interested in theme cruises, murder-mystery parties, or family reunions.