158 CHAPTER8IDENTIFYINGMARKETSEGMENTS ANDSELECTING TARGET MARKETS
Not all attempts to target children, minorities, or other segments draw criticism.
Colgate-Palmolive’s Colgate Junior toothpaste has special features designed to get chil-
dren to brush longer and more often. Golden Ribbon Playthings has developed a
highly acclaimed and very successful black character doll named “Huggy Bean” to con-
nect minority consumers with their African heritage. Other companies are also
responding to the needs of specific segments. Black-owned ICE theaters noticed that
although moviegoing by blacks has surged, there is a dearth of inner-city theaters, so it
began opening theaters in Chicago and other cities. ICE partners with the black com-
munities in which it operates, using local radio stations to promote films and featuring
favorite foods at concession stands.^36
Thus, in the choice of market targets, the issue is not who is targeted, but rather
how and for what purpose. Socially responsible marketing calls for targeting and posi-
tioning that serve not only the company’s interests but also the interests of those tar-
geted.^37EXECUTIVE SUMMARY
Companies usually are more effective when they target their markets. Target market-
ing involves three activities: market segmentation, market targeting, and market posi-
tioning. Markets can be targeted at four levels: segments, niches, local areas, and indi-
viduals. Market segments are large, identifiable groups within a market, with similar
wants, purchasing power, location, buying attitudes, or buying habits. A niche is a
more narrowly defined group.
Many marketers localize their marketing programs for certain trading areas,
neighborhoods, and even individual stores. The ultimate in segmentation is individual
marketing and mass customization, a trend that is growing as more customers take the
initiative in designing and buying products and brands. In addition, marketers must
analyze the patterns of segmentation in a market to get a sense of their positioning
alternatives and that of the competitors.
Markets are segmented in a three-step procedure of surveying, analyzing, and pro-
filing. The major segmentation variables for consumer markets are geographic, demo-
graphic, psychographic, and behavioral, to be used singly or in combination. Business
marketers can use all of these variables along with operating variables, purchasing
approaches, situational factors, and personal characteristics. To be useful, market seg-
ments must be measurable, substantial, accessible, differentiable, and actionable.
Once a firm has identified its market-segment opportunities, it has to evaluate
the various segments and decide how many and which ones to target. In evaluating
segments, managers look at the segment’s attractiveness indicators and the company’s
objectives and resources. In choosing which segments to target, the company can
focus on a single segment, selected segments, a specific product, a specific market, or
the full market; in the full market, it can use either differentiated or undifferentiated
marketing. It is important for marketers to choose target markets in a socially respon-
sible manner, by ensuring that the targeting serves the interests of the market being
targeted as well as the company.NOTES
- Regis McKenna, “Real-Time Marketing,”Harvard Business Review,July–August 1995, p. 87.
- See James C. Anderson and James A. Narus, “Capturing the Value of Supplementary
Services,”Harvard Business Review,January–February 1995, pp. 75–83.