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Segmentation and Target Market Paper Essay

Write a white paper on a company of your choice and discuss the market segmentation within that industry along with the target market for the company and the selection process for that target market.

Required Elements:

No more than 2100 words
Include demographic, psychographic, geographic, and behavioral characteristics for the selected company. A positioning statement for the company with careful consideration of their brand and strategy Paper is consistent with APA guidelines.


The fundamental component of Market segmentation is a market-based strategy. A market segment is a purchase behaviors and different descriptive characteristics and specific group of customers with distinctive customer needs (Baker M.J, 1995) By categorizing markets into sub sectors, targeting marketing effort in such a way as to meet the other requirement and technical requirements of each of these, organizations may be able to secure big competitive position than if they attempted to satisfy the fundamental requirements of the market as a whole. In market segmentation there are four criteria that have to be satisfied in order for market segmentation to be effective.

A market segment should be accessible, identifiable, substantial, and stable. In Identifiable, there should be indicators of observable that enable the segment to be defined and quantified (Baker M.J, 1995). Accessible, that is, it should be probable to target specifically the segment using distribution channels and existing communication. In Substantial, that the segment should be of enough size to make the effort involved in segmentation worthwhile. In the Stable, the segment there should be capitalized by sufficient time on the investment implicated in segmentation (Baker M.J, 1995).

Brief Discussion:

Using a variety of philosophical approaches markets can be segmented in terms of operationalzing these approaches, demographic approaches, psychographic approaches, geographic approaches, and behavioral approaches and are commonly used (Dann S. & Dann S. 2004).

Demographic Approaches:

There are a much number of demographic-related bases for market segmenting such as gender, age, the stage in the family life-cycle, household and ethnic group composition. Gender is also generally used basis for segmenting markets as it is an easy one to measure and the firms can have a reasonably good idea of the gender-specific market in any given area. In market segmentation age is one of the most widely used bases which is generally easy to measure the size of segments.

Usually Individuals go through a number of family roles, and that at each stage of development, an individual’s buying behaviors are likely to change as well as their ability to pay for those purchases will also change. Households differ in their composition and size in which these differences are associated with varied buying behavior. Various ethnic groups in there are evidence that retain distinctive preferences in their purchases which distinguishes them from the native community (Dann S. & Dann S. 2004).

Geographic Approaches:

The geographic approaches have commonly used as a basis for market segmentation. Very often, there have been very good geographical logic of why the preferences of product should vary between regions. In the world most of the companies have managed to adapt their product offer to meet the needs of various regional segments.

Behavioral Approaches:

In behavioral approaches a social class the most measurable indicators that are commonly used as a basis for market segmentation are income and occupation. The size of firms where individuals’ employing and their pension rights are effectively reflecting their purchasing power and individuals’ status in the marketplace. Many Researchers have find out that, while incomes of individuals’ are increase, their expenditure on certain categories of product increases.

Psychographic Approaches:

In the psychographic approaches, the factors such as the effects of attitudes, values, life-style, loyalty and benefit sought will be considered. People of variety of socio economic status and similar age may lead rather different life-styles, and the firms have been adapting their products quickly to meet the needs of these life-styles. Categorize to Attitudes are more difficult and maybe revealed only in subtle ways. Values can be very difficult to measure than attitudes and inconsistencies of apparent may question the existence of a subconscious value system.

Each market segment in a certain ways is likely to respond to variations in product packaging, pricing , design, and promotion. In many of the markets, a segment can be found that shows considerable loyalty to a brand of product, while other segments will be prepared to switch between product and response to brands, with offering more lower prices and benefits (Armstrong G. & Kotler P, 2005).

HMV Market Segmentation:

In my paper I explain the HMV’s market segmentation. HMV is generally known as one of the world’s leading retailers of video and music, with 428 stores worldwide. Their strategy is very clear for the pursuit of their vision and goal. The market identification as well as segmentation of target markets is the important element of each strategies of marketing at which they are the basis for determining any particular of the marketing mix, pricing, which is product, promotion and place. The company’s market segment opportunities reveals by market segmentation. The company has decided and has to evaluate the various segments which and how many segments it can serve the best. When a company evaluating different market segments, they must consider of three factors, that is, growth and segment size, segment structural attractiveness and also company’s resources and objectives. (Armstrong G. & Kotler P, 2005)

Different categories of each DVD and music section are of different target markets and each segment can be addressed with an individually targeted marketing mix. For effective market segmentation all of these distinctive categories have met and the criteria as they are easily identified, all the needs demanded by customers will comprise and provided with a variety of video and music in each store, the customers can purchase their products in the case of accessible through online, official website or in store and also stable in the way that they are able to establish their reputations known worldwide. Marketing approach by the segment-orientated generally offers a range of advantages for both, customers and businesses. It can be concluded that HMV is using the geographic, demographic, behavioral and psychographic approaches in their market segmentation.

HMV is known worldwide at which there are 428 stores worldwide and this make very possible for the customers are able to purchase their products in their website or their own country. This is considered as an effective segmentation since they analyze the customers as a whole but not for only certain places, certain countries or regions. The customer’s income level might affect their purchasing power of products. When they advertise the product they must look the price of products in the market should be set under fair price at which in average everyone is able to purchase their product.

HMV’s Psychographic approach is being used in their market segmentation. The attitudes, values, life-styles, brand loyalty and benefit sought is important when segmenting the market as this can enable the company to seek the target customers in the market. Different people have different interest. In this way companies may tend to have different preferences and tastes on the products and therefore the company provides a great variety of products to the customers so that everyone is able to purchase the products which they desired. In addition to that, the status of brand loyalty to the products among the customers is vital to the HMV and company has made a great effort on it to make its brand known universally. The companies’ ability to familiarize about its competition, markets, the habit of buying and needs of its customers, the more exactly it can to target marketing efforts at which most likely to purchase the company’s products(C. Homburg, J. P. Workman, Jr., and O. Jensen, 2000). Under the section of music, different strategies of each marketing mix is applied unlikely among various categories of these.

In niche marketing differentiated segmentation, which is also referred, is being used for HMV and this can be observed when they focuses the company’s activities and analyzed the total market as well as to develop a single marketing mix which is directed towards a particular group within the market and this allows the company to specialize also to develop a reputation within a particular field. (Dann & Dann, 2004) Under music section, the
company can be divided into nine main genre, they are country, dance, dance, easy listening, rock/pop, jazz/blues, soundtracks and world/folk, while the DVD section, it can be classified into five main categories, that is, children, movies, sports, music and other. From this, every category of HMV’s for DVD section will be divided into different type and thus this can ease the customers to search for the desired products easily at any time.

For movies, they are sub-classified into thirteen categories, which is, adventure/fantasy, children’s, comedy, foreign, action/war, animated, Japanese animated, drama, thriller, musicals, sci-fi/horror, western and miscellaneous. Subsequently, there are four main categories for children’s’ DVD, they are Disney, educational and feature film, cartoons. Furthermore, there are boxing, cricket, AFL, basketball, equestrian, golf, fitness/aerobics, tennis, motor sport, soccer, winter sports, water sports, and wrestling under sports’ DVD section. Besides these things, there are eight sub-classifications under TV/shows, they are, comedy, action, drama, adventure/fantasy, thriller/crime, sci-fi/horror, western and miscellaneous. For music, there are another six sub-divisions like country, jazz/blues, classical, karaoke, rock/pop as well as specialist. And the last of all, there are ten sub-divisions under other category, which is, cookery, documentary, adult, gardening, aviation, history, how to and also railways.

The mix of marketing is the set of factors that the marketing practitioner can control through their own organizational efforts, which include price, product, place and promotion (C. Homburg, J. P. Workman, Jr., and O. Jensen, 2000). A companies’ most important factor i.e price. It has to be considered when it will affect the ability to purchase the products among the customers. Before setting the prices for their products, the company ought to analyze all the relevant information of the existing customers in the market so as to determine their ability of purchasing the products.

Products are another most important asset in the company and thus the design and packaging of the CD covers will be different color in order to attract customers of varied tastes and preferences, age range, or other possible reasons. Another asset is Place. Place is important for marketing target because the products can be distributed to the customers in the located store worldwide and the customers are able to purchase the products easily. Promotion is an essential for targeting market so one to be considered about to products advertise that are available to the customers.


Baker, M.J. (1995), Marketing: Theory and practice, 3rd edn, Macmillan Press Ltd, Basingstoke, Hampshire. Dann, S. & Dann, S. (2004), Introduction to marketing, John Wiley & Sons Australia, Ltd., Milton, Queensland. HMV revised 2005, viewed 28 Jul. 2005, Armstrong, G. & Kotler, P. (2005), Marketing: An Introduction, 7th edn, Pearson Education, Inc., Upper Saddle River, New Jersey. C. Homburg, J. P. Workman, Jr., and O. Jensen, “Fundamental Changes in Marketing Organization: The Movement Toward a Customer-Focused Organizational Structure,” Journal of the Academy of Marketing Science, Vol. 28, no. 4 (2000): 459–478

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