“The total potential consumer market consists of the 7 billion or so people in global markets” (Nickels, McHugh, & McHugh, 2012, p. 360). While numerous differences segment the market, the potential is huge. Market segmentation divides potential markets by identified characteristics. Demographic, geographic, personality/values, and lifestyle/status are but a few of the ways that markets can be segmented. As an example, women currently account for a little more than half of the population (51%) and are, therefore, considered the largest market segment. In addition, marketing managers should focus on the buying power of the growing minority markets (Ferrell, Hirt, & Ferrell, 2012). Understanding the concept of market segmentation allows organizational marketing leaders to focus on maintaining current markets, as well as emerging opportunities (Tuma, Decker, & Sholz, 2011).
Global trading practices and worldwide economic changes (growing middle class and capitalism in former socialist or communist countries) account for many emerging opportunities (Sheth, 2011). These new market opportunities can change the entire landscape in marketing practices. The original marketing myopia discussed in Levitt’s article (1960) warned against too narrowly defining the business by products instead of customer wants and needs. The current marketing myopia occurs if marketers view (1) “…the customer to the exclusion of other stakeholders, (2) too narrowly define the customer and his or her needs, and (3) fail to recognize the changed societal context of business that necessitates addressing multiple stakeholders” (Smith, Drumwright, & Gentile, 2010, p. 4). Building on this concept, Badot and Cova (2011) further encourage marketing managers to accept a more collaborative, ‘market with’ versus the older ‘market to’ philosophy.
Once an organization has segmented the potential markets, they may want to further isolate a specific target audience for each of their products. A key benefit to target marketing is a more focused product mix that may lead to competitive advantage and increased profits within the attracted audience market. For example, in South Florida, we have a grocery store chain, Sedanos, aimed at the large Hispanic market audience. The store offers special Spanish product lines and Spanish-speaking employees.
Target marketing can include a “focus on a single segment, several segments, a specific product, a specific market, or the full market” (Kotler, 2000, p. 279). Each of these options must be carefully evaluated to determine the corporate risks versus benefits. In addition, the organizational capabilities and a blend with the company’s overall mission and vision must be apparent for heightened success.
An interesting concept occurs in the pharmaceutical industry. While companies segment by products, the question becomes whether pharmaceutical marketing departments should develop two separate selling messages – one to the physicians who prescribe the product, and one to the patient who is the ultimate consumer of the product. Saxton (2011) conducted a study on this dilemma and the results indicated that similar messages should be designed for both parties. This is a logical outcome since “the primary reason they advertise to consumers is to have them see their doctor, request the advertised brand, and receive a prescription for it” (p. 387).
This brings up a discussion on branding. The concept of branding is extremely interesting since it is the one aspect of the product mix that is unique – competitors cannot copy it. “Effective branding entails a memorable name, and a ubiquitous slogan combined with an instantly recognizable and unique logo” (Ogbuji, Anyanwu, & Onah, 2011, p. 150). One only has to mention names such as McDonald’s, Coca Cola, or Ford to conjure images of logos and slogans.
It is interesting to note that several factors influence brand awareness. Branding that appeals to the consumers’ lifestyle, personality, and emotions influences recognition and buying decisions (Rajagobal, 2010). Think for a moment – what brands have your loyalty? What influences your choice to choose one brand rather than another?
Badot. O., & Cova, B. (2008). The myopia of new marketing panaceas: The case for rebuilding our discipline. Journal of Marketing Management, 24(1-2), 205-219.
Ogbuji, C. N.. Anyanwu, A. V., & Onah, J. O. (2011, June). An empirical study of the impact of branding on consumer choice for regulated bottled water in Southeast, Nigeria. International Journal of Business and Management, 6(6), 150-166.
Ferrell, O. C., Hirt, G. A., & Ferrell, L. (2012). Business: A changing world (8th ed.). New York, NY: Mcgraw-Hill Irwin.
Kotler, P. (2000). Marketing management (Millennium ed.). Upper Saddle River, NJ: Prentice Hall.
Levitt, T. (1960, July/August). Marketing myopia. Harvard Business Review, 38, 57-66.
Nickels, W. G., McHugh, J. H., & McHugh, S, M, (2012). Business: Connecting principles to practice. New York, NY: McGraw-Hill Irwin.
Rajagopal. (2010). Conational drivers influencing brand preference among consumers. Journal of Transnational Management, 15(2), 186-211.
Saxton, K. (2011, June). Rx for brand consistency: Should pharmaceutical marketers send different messages to physician and consumer audiences? Journal of Advertising Research, 51(2), 380-393.
Sheth, J. N. (2011, July). Impact of emerging markets on marketing: Rethinking existing perspectives and practices. Journal of Marketing, 75, 166-182.
Smith, N. C., Drumwright, M. E., & Gentile, M. C. (2010, Spring). The new marketing myopia. Journal of Public Policy and Marketing, 29(1), 4-11
Tuma, M. N., Decker, R., & Sholz, S. W. (2011). A survey of the challenges and pitfalls of cluster analysis application in market segmentation. International Journal of Market Research, 53(3), 391-414.