4 Key Dimensions of Market Segmentation. 3 Effective Marketing Strategies for Target Marketing.

Dimensions of Market Segmentation

When marketers are able to identify characteristics that people share
and there is a substantial enough number of such people in this group
that would seem likely to want to purchase their products, it can be
said that the marketers would ostensibly target these groups—or segments.
We call these processes market segmentation and target marketing,
respectively. The most widely accepted and used criteria or
dimensions for market segmentation include the following:

• Demographic:

Those based upon such factors as age, gender,
sexual preference, race, ethnicity, education, marital status,
number of children or other dependents, income, and so on.

• Geographic:

Those based upon such factors as neighborhood
(typically identified by ZIP code), city, state, region, and so on.

• Psychographic:

Those based upon attitudes, interests, and opinions
(AIO). These may be sociocultural, religious/spiritual,
philosophical, aesthetic, ethical/moral, political, economic,
technological/scientific, curricular or extracurricular/occupational
or personal, and so on.

• Usage related:

Those based upon how the product is actually used.
Quantity is one such element. Marketers of beer know that their
strategies and tactics must be different for appealing to heavy users
(e.g., the stereotype of construction workers) rather than moderate
users (e.g., upscale connoisseurs, the stereotype of “yuppies”). Timing
is another element. Operators of movie theaters know that customers
who attend on weekday afternoons may be a different breed from
those who attend on weekend evenings, and they must adapt their
strategies and tactics to address this. Application or specific purpose of
usage is critical. Purveyors of baking soda know that, while most customers
use their product to prepare baked food items, these same
individuals and other individuals may use the product as an odor
absorbent (in refrigerators and in open spaces), a toothpaste, a poultice
(for burns), a stain remover, and so on.

For business-to-business applications, you might also want to
think in terms of:
• Sector (e.g., for-profit entities, not-for-profit entities)
• Industry (e.g., entertainment and media, financial services,
petrochemical, biomedical, cyber-related and computer-based/
high technology)
• Size (e.g., regarding annual sales volume, asset base; small,
midsized, big business)
• Territory (e.g., by neighborhood, city, state, country, region/
continent)

Marketing Strategies

Having identified market segments, marketers must then choose from
strategies that best suit their objectives and limitations, as follows:

• Concentrated marketing:

Involves introducing a single version of
a product that is designed to appeal to a single, particular market
segment. This approach is well suited to organizations that
have limited financial resources and/or enjoy an expertise specific
to a particular type of customer base. Weight Watchers
is an organization that employs this strategy, for the latter
reason. It concentrates on serving those who are overweight
or weight conscious.

• Differentiated marketing:

Involves introducing a number of
different versions of a product, each designed to appeal to a
different market segment. Generally, this strategy is adopted
by organizations with substantial financial resources. They
may have started out using a concentrated or undifferentiated
marketing strategy and, as success and growth ensued, elected
to develop, in effect, a concentrated marketing strategy for
each of two or more market segments.
General Motors and Ford Motor Company are organizations
that employ this strategy. They both sell cars designed to
appeal to many different types of consumers and/or to satisfy
many different needs in the form of economy cars, sports cars,
luxury cars, station wagons, vans, trucks, and so on.

• Undifferentiated marketing:

Involves introducing only a single
version of the product in the hope that it will appeal to an
entire universe of consumers, an appeal to the lowest common
denominator. Once upon a time, when life was simpler,
when the world wasn’t quite so fragmented and market segments
didn’t exist or perhaps, more accurately, were not readily
identifiable or even thought of as significant, this approach
was the norm. Prior to the days of Classic Coke, Diet Coke,
Caffeine-free Diet Coke, Cherry Coke, and the myriad other
versions of Coke, there was plain old Coke or Coca-Cola.
And, in contrast to the previous example for the differentiated
marketing strategy, Ford Motor Company limited its
original product offering, the Model T, not only to a single
version but to a single color. (“You can have any color you
like, so long as it’s black.”)

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