Segmenting Consumer Markets

There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination, to find the best way to view the market structure. • Table 7.1 outlines the major variables that might be used in segmenting consumer markets. Here we look at the major geographic, demographic, psychographic, and behavioral variables.

Author I Market segmentation Comment | addresses the first simple-sounding marketing question: What customers will we serve? The answer will be different for each company. For example, The Ritz-Carlton targets the top 5 percent of corporate and leisure travelers. Hampton targets middle-class ^people traveling on a budget.

Designing a Customer-Driven Marketing Strategy

In concept, marketing bolls down to two questions: (1) Which customers will we serve? and (2) How will we serve them? Of course, the tough part is coming up with good answers to these simple-sounding but difficult questions. The goal is to create more value for the customers we serve than competitors do.

Select customers to serve

Segmentation

Divide the total market into smaller segments

Targeting

Select the segment or segments to enter

Create value for targeted customers

Decide on a value proposition

Differentiation

Differentiate the market offering to create superior customer value

Positioning

Position the market offering in the minds of target customers

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