The segmentation of the market helps the marketers to identify the customers who share the same needs and wants (Kotler, & Keller, 2012). There are many different levels of market segmentation such as, geographic, demographic, psychographic, and behavioral segmentation (Kotler, & Keller, 2012). The geographic segmentation used when the marketers segment the market by focusing on a specific geographic area (Thomas, 2007), demographic segmentation concentrates on gender, age, housing type, income, and the educational level (Thomas, 2007), the psychographic segmentation is studying the customers behaviors, emotions, beliefs, and lifestyle (Thomas, 2007). Behavioral segmentation divides the consumers to a specific group based on the way they respond, use, and know the product (Riley, 2012). According to Kotler, & Keller (2012), not all segmentation schemes are useful, and to be useful, the segments must be measurable, profitable enough, accessible, differentiable, and actionable. The market targeting is the second step after market segmentation and before market positioning.
According to Kotler, & Keller (2012), the geographic segmentation divides the market to nations, states, regions, counties, and cities, for instance, the company could choose a specific nation or states to market their brands. Many Chinese restaurants choose a specific geographic area to reach the concentration of force (Thomas, 2007).
The age, gender, income, education, religion, race, generation, nationality, family size, social class, and occupation, is very important information to the marketer to highlight the customer needs and wants (Kotler, & Keller 2012). The race and the religion are very important to identify the consumer trend and needs, and it can be easy to identify by the first name and family name, according to Webber (2006), the people from different cultures have name and family name, and every culture common names are different than the other, for instance, the Asian names are completely different than Muslims names, and the Hispanic names are different from both. Figure (1) illustrates how can we use the names to identify the consumer’s culture or race. Since the name reflects the person culture, belief, and race it would be useful information to the company to associate the individual trend and needs (Webber, 2006).
The psychographic (lifestyle) segmentation concentrates on customer value, behavior, beliefs, emotion, and interests (Thomas, 2007), according to Kotler, & Keller (2012), psychographic is the science that gathers the psychology and demographic to understand the customers. Strategic Business Insight is one of the commercial classification systems that measure and study psychographic, the SBI helps their clients to identify new opportunities based on market insight (SBI, 2015).
The way the customers respond to the product, how they use it, and what they know about the product, in other words, dividing population based on their behavior is behavioral segmentation. The behavioral segments can group customers in terms such as occasions, user stats, usage rate, buyer-reading stage, and loyalty status (Kotler, & Keller 2012). Occasions. According to Kotler, & Keller (2012), the occasions can determine temporary aspects of a customer’s life. The marketers can highlight the buyers based on the occasions, for instance, the occasions of business, vacation, or family, all of them need a transportation such as air travels (Kotler, & Keller 2012). User status. The products in general have users, non users, potential users, first time users, and regular users (Kotler, & Keller 2012). The way to attract a non users or potential users is to understand why they are not buying the product, do they lack in the knowledge of the product benefits? Is the culture or the belief of the customers restricts them to buy the product (Kotler, & Keller 2014)? Usage rate.
The market divided into light, medium, and heavy product users, the heavy users high percentage of total consumption (Kotler, & Keller 2012), the problem with heavy users is, he is very loyal to a specific brand, and not loyal to another. Buyer-reading stage. The marketer can use the marketing funnel to identify the consumers who are aware or unaware, informed, interested, who desire the product, and the consumer who intends to buy (Kotler, & Keller 2012). The marketer should concentrate on how to build awareness during the advertising by providing simple message and easy to understand by customers (Kotler, & Keller 2012), for instance, Amazon providing simple message on their logo by establishing an arrow start from the A letter, heading to the Z letter, which is mean that Amazon have all types of products.
Loyalty status. According to Kotler, & Keller (2012), the consumer who concentrates and buy one brand every time is a hard-core loyal customer, and such a customer can help to know the product strength (Kotler, & Keller 2012), the customer how buy two or three brands are a split loyal customer, and this type of customers helps the company to identify which brand is the most competitive, and what brand does not attract the consumer, in other words, identifying the strength and the weakness of the marketing plan (Kotler, & Keller 2012).The consumer change loyalty from brand to another is shifting loyal customer, and the switchers are the customers who have no loyalty to any brand (Kotler, & Keller 2012).
The targeting is the second step of target marketing after marketing segmentation, now we need to establish specific strategies to the target markets, and there are three general strategies to select the target markets (Small Business).
This strategy view the market as one group with no consumer segments, this strategy is useful for the product with low competition (Small Business).
This strategy concentrates on a specific market, the company focusing on a single segment, so can understand the needs and wants of the market. This strategy can benefit the small firms by focusing on one segment, make them compete against larger companies (Small Business).
Multi segment targeting can offer many benefits, but at the same time, the cost is high, because it’s required more efforts from the management, increasing in the marketing research, and promotional strategies (Small Business).
Market positioning is the third activity in the target market (Kotler, & Keller 2014), positioning is improving the brand or product image in the customers’ minds (Small Business). Enhancing the customer perception regarding the product is another element in the market positioning activity. Effective positioning requires full knowledge of competitive products that is targeting the same market (Small Business).
There are three activities in target marketing, market segmentation that’s included geographic segmentation and its concentration in the geographic area, demographic segmentation that segment individuals based on age, gender, belief, and social class, psychographic segmentation gathers psychology and demographic to understand the consumers, behavioral segmentation focus on the customer responds. The market targeting and market positioning is the last two activities of target marketing.
Kotler, P., & Keller, K. L. (2012). Marketing management. prentice hall: upper saddle River, NJ. Riley, (2012). Market segmentation , behavioral segmentation. http://www.tutor2u.net/business/marketing/segmentation_bases_behavioural.asp Small business tool kit. Market analysis. http://toolkit.smallbiz.nsw.gov.au/part/3/10/49 Thomas, W., (2007). Market Segmentation. http://www.decisionanalyst.com/publ_art/marketsegmentation.dai Webber, (2006). Using names to segment customers by cultural, ethnic or religious origin. https://www.mrs.org.uk/pdf/27_11_06_richard_webber.pdf