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Segmentation and Target Market Paper Essay

This plan was put into in 1936, establishing the Government Employees Insurance Company, the company known and respected today as GEICO. GEICO was primarily directed toward federal employees and certain groups of enlisted military officers. Lillian Goodwin actively marketed the company to this group of consumers and within a year, GEICO had written over 3,700 policy holders and employed 12 staff members. GEICO and Demographic Segmentation

In the midst of the most market segmentation factors, demographics take part in an critical role in an organization upcoming marketing strategies. In demographic segmentation, we divide the market on variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class (Kotler and Keller, pg. 216, 2012).

The most commonly well thought-out demographics segmentation for insurance companies are the need for reliable quality, ease of purchase, continuing use, stress-free environment and ease of access when service is needed. This is what the consumers purchased decisions are determined by. When coming up with a decision on where to put a new location for the business, the information will bring about where your target market is located, for this, the demographics is an exceptional tool. Demographics give a widespread of who are your customers, where they are to be found at, and what they do. Although GEICO may have figured out their demographics group, consumers in that grouping may still have set apart opinions of the benefits or value of the product you plan to sale. It is these opinions that inspire consumers to buy goods and services for not the same reasons. These reasons are identified as psychographics.

Customer psychographics provide more complexity information about the target customers. Psychographics consist of a type of to the opinion of the customer base that includes more in depth information about each distinct consumer. Psychographic information takes an in depth look at why consumers purchase, what they purchase, and when they purchase it. This is why psychographic information is very important to obtain due to the mixture of cultural and racial. This mixture of cultural and racial are found in most the public and these are some the essentials that most often influence consumers’ habits. The customer demographics state who your customers are and customer psychographics state why your customers are who they are.

GEICO and Psychographic Segmentation

In order to better understand consumers, the use of psychology and demographics are needed. In psychographic segmentation, consumers are separated into not the same groups on the base of customer lifestyles, is how psychographic segmentation groups them. The activities, interests, opinions, attitudes, and values are some of the basic psychographic characteristics.

The Activity Interest Opinion (AIO) survey, that is sometimes called a “lifestyle survey used a tool that marketers most commonly use to generate psychographic profiles .” Significantly, faultfinders charge with some clarification that psychographic segmentation can come as marketing hocus pocus. It is critical to identifying and understanding psychographic characteristics, because it is necessary if you want to understand your buyers’ behaviors.

GEICO and Geographic and Behavioral Segmentation

Geographic segmentation divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods (Kotler and Keller, pg. 214, 2012). In that way it can tailor marketing programs to the needs and wants of local customer groups in trading areas, neighborhoods, even individual stores. In a growing trend called grassroots marketing, such activities concentrate on getting as close and personally relevant to individual customers as possible (Kotler and Keller, pg. 214, 2012).

Geographical factors are more commonly acknowledge by global or international organization. For GEICO, geographical information could certainly be used for the Canada markets. A key reason for this is insurance in the United States is mandatory to be only liability insurance. Based on the use, attitudes, knowledge, and response to the product, the behavioral segmentation of a market is the division and grouping of the market. Occasion, benefits sought after, loyalty status, usage rate, and user status are most commonly associated with behavioral segmentation.

Occasion refers to the when they purchase the product. From the stand point of automobile insurance, GEICO recognizes that in order to have parts of the market the company must get consumers interested in trying the product.

The benefit of insurance is often seen as an obligation, however, there are consumers that acknowledge the benefit should there be a possible for loss. Loyalty standing for GEICO in the selected market only if those consumers that have some knowledge of the insurance products. While looking at the ages between 25 to 49 year old most of these customers have selected the company without a lacking for advertising, because their parents have passed down the brand name for them. Usage rate is normally not well-thought-out by the company because insurance is a unknown future benefited product. Most consumers would hope that nothing will go wrong, but in the event that something happens, they would also like to know that it is being taken care of.

Positioning Statement

While delivering the humor and charisma, that is what the consumers expect from GEICO. GEICO positioning is reinforce as a leader at the front position of technology. GEICO wanted to be able to influence their intended consumers to overcome their disinterest and go to the geico.com site for a rate quote. They can do this, by concentrating on the website easy excess of use in a distinctive way. The essential approach of the “Caveman” promotion was to be an assistant in using www.geico.com for rate price with “easy.” GEICO has added levity and character to the insurance bargain hunting through reliable and distinctive communication, and this is GEICO way of handling this was, in fact, not the same and exciting. The commercials carry on the story of a group of cavemen who was upset by GEICO ad slogan: “So easy a caveman can do it.” As the promotion make known, cavemen are seen in different situations, all in the same way, upset by this politically not so true statement.


In spite of the extensive practice of segmentation as an benefit for decision making, the frequently used segmentation methods consist of a numeral of subjective decisions, and organization may not like the fully the degree to that most of these decisions will affect the outcome of an organization. While at hand there will always be a subjective factor in segmentation analysis methods such as gathering or mapping.


View more »Expand viewKotler, P., & Keller, K. L. (2012). Marketing management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

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