Marketers have to create customer-driven marketing strategies. Without a customer-driven marketing strategy a business is bound for failure. There are four components to customer-driven marketing strategies segmentation, targeting, differentiation, and positioning. Segmentation and targeting involve dividing the entire market into smaller sections/segments and then choosing what sections/segments will be the most beneficial to pursue (Kotler and Armstrong, 2013).
Through market segmentation marketers are able to break up a large market into smaller more defined sections. This is useful because for the most part, markets are very large and broadly defined. Markets can be segmented by:
- Geographics
- Demographics
- Psychographics
- Behavioral
Geographic segmentation involves dividing the market by locations. This includes nations, regions, states, countries, cities, and even down to rural and suburban neighborhoods (Kotler and Armstrong, 2013). Geographic segmentation can also involve climate if it pertains to the product/service.
Demographic segmentation involves dividing the market by demographics. Demographics can be defined by and include age, gender, family size, life-cycle, income, occupation, education, religion, race, generation, nationality (Kotler and Armstrong, 2013). “Demographic segmentation is the most popular basis for segmenting customer groups,” (Kotler and Armstrong, 2013). Demographic segmentation is popular because it is easy to determine. When considering customers the variables of demographic segmentation are very apparent and require little research.
Psychographic segmentation is more difficult and requires more market research. “Customers in the same demographic group can have very different psychographic charteristics,” (Kotler and Armstrong, 2013). The variables that make up psychographic segmentation are social class, lifestyle, and personality (Kotler and Armstrong, 2013). Social class can vary from lower to upper. Different social classes have differing levels of income and purchasing behavior. Customer’s lifestyles shape the products/services that they purchase. For example, a person who leads and active lifestyle is more inclined to buy running or hiking shoes. Personality is another factor that determines psychographic segmentation. Personalities can range from outgoing to introverted.
Behavioral segmentation pertains to knowledge, feelings, and attitudes towards products/services. Behavioral segmentation variables consist of occasions, benefits, user status, user rates, loyalty status, readiness stage, and attitude toward product/service (Kotler and Armstrong, 2013). Occasions are related to why and when customers purchase products/services. During the month of February people are more inclined to purchase Valentine’s Day cards rather than in November. Different customers require different benefits from the products and services they purchase. Some examples of benefits are quality, service, economy, convenience, and speed (Kotler and Armstrong, 2013). User status, user rate, and readiness stage are closely related behavioral variables. A customer may have never heard of a product making them a non and unaware user with no usage rate. Loyalty status concerns a customer’s inclination to a particular brand. The easiest way to understand this concept is someone who prefers Coke over Pepsi. The customer who is loyal to Coke is always going purchase Coke when given a choice between the two. The attitude toward the product is the final variable of behavioral segmentation. This variable can be understood by considering how people feel about a certain product. For example, Google Glass is a new and innovative product some people may be enthusiastic, while some may be uninterested.
Through the evaluation of the different segments a marketer can then begin to target particular markets. A target market is a segment or segments of buyers that share common needs or characteristics that a company seeks to cater to (Kotler and Armstrong, 2013). Four way companies can go about target marketing are:
- Undifferentiated (mass marketing) – Goes after the entire market.
- Differentiated (segmented marketing) – Goes after a number of segments.
- Concentrated (niche) – Focuses on one or two very small market segments
- Micromarketing (local and individual) – Caters to a particular location/community and personal preferences.
References
Kotler, P., & Armstrong, G. (2013). Principles of marketing. (15 ed.). New Jersey: Pearson Education Inc.
Marketing Portfolio Blog 
