4.3 Market segmentation and targeting

Market segmentation and targeting is at the core of marketing strategy and consumers (or potential consumers) are the key stakeholder group for both commercial and social marketers. In this section we focus on those specific consumers whose behaviour is the focus of the social marketing activity.

In Section 3.2, the factors which impact on consumer behaviour were outlined.

It is these factors – e.g. age, income, lifestyle – that form the basis for market segmentation. The process is as illustrated below.

Market segmentation is the process of dividing the market in to groups of consumers who respond in a similar way to a given set of marketing stimuli (e.g. price, product features) or, alternatively, groups of consumers/customers with homogeneous needs or preferences. This may be on the basis of demographics, e.g. age, gender; geographics, e.g. by country, rural/urban areas; psychographics, e.g. lifestyle; or behavioural factors, e.g. brand loyalty.

Subsequently the organisation will select a target market based on a number of factors. For example, will the target market provide the required level of behaviour change (or meet other objectives)? Will it be accessible to the organisation taking into account the available resources, etc.?

The third stage is to position the product/organisation (a) against competitors and (b) in the minds of the consumer, i.e. arranging for a product/service to occupy a clear, distinctive and desirable place in the market and in the minds of target customers. This is achieved through product design, pricing, promotional activities, etc. Communication and branding are essential elements of a marketing programme and these are discussed in the next section.