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Purpose Of Market Segmentation

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“Until the 1960s, few firms practiced market segmentation” (Lamb, 136). However, marketers today segment a market into “market segments”, or “subgroup(s) of people or organizations sharing one or more characteristics that cause them to have similar product needs” in order to advance their organizations (Lamb, 136). The purpose of “market segmentation”, or the process of dividing a market into those market segments, is to “enable the marketer to tailor marketing mixes to meet the needs of one or more specific segments” and thus “better allocate resources” (Lamb, 137). Perhaps, the most crucial market segmentation strategy is “psychographic segmentation”, which is market segmentation based on“personality, motives, lifestyles, and geodemographics”…show more content…
Although initially helpful, demographics don’t usually “paint the entire picture” (Lamb, 143) or “shed light on the passion points and interests of an audience” (Affinio, Inc.). Psychographics actually “add meat to the bones“ or “the skeleton” of demographic segmentation (Lamb, 143) by connecting on a “cultural and emotional level” with consumers (Affinio, Inc.). Even Todd Yellin, VP of Product at Netflix, depicted demographic data “as nearly irrelevant" (Brennan). "An audience 's interests transcend demographics” since consumers can “share the same passions and interests” (Affinio, Inc.) and thus similar identities, “no matter their age, income bracket or geographic location” (Kittaneh). Market segmentation “can no longer rely upon rigid ideas” in demographics, but should instead use “subtler signals” with meaningful psychographic similarities rather than superficial demographic correlations (Brennan). Psychographic segmentation is based on personality, lifestyles, geodemographics, and emotional…show more content…
For example, Subaru targeted the following segments: “medical professionals”, “rugged individualists”, and even “lesbians”. They created ads based on the car’s appeal to each group. For lesbians, Subaru’s appeal was that it “fit their active, low-key lifestyle”(Mayyasi). Red Bull is another example of “building an empire by creating culture” of “adventure, adrenaline and epic escapades” (Kittaneh).
Combining geographic, demographic and lifestyle, “geodemographic segmentation” is the process of “segmenting potential customers into neighborhood lifestyle categories” (Lamb, 143). “College students” often share “demographics and lifestyle” since they’re often around “insular college campuses”. The Google Pizza Program hired student brand ambassadors who “transformed into word-of-mouth marketers” to talented programmers. (Lamb,
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