Segmentation and Market Target

Topics: Psychographic, Marketing, Market segmentation Pages: 6 (1114 words) Published: October 19, 2014


Segmentation and Target Market Paper
MKT/571
Segmentation and Target Market Paper
To obtain success, and then retain success, organizations need to determine which market segments to focus (Kotler & Keller, 2012). Additional consideration is necessary to ensure that the organization can effectively serve this market segment. According to Kotler and Keller (2012), the finest marketing plans identify and embrace segment differentiation by determining the demographic, psychographic, geographic, and behavioral characteristics. For example purposes, this white paper discusses segmentation and target market for “Your Organization”. Consumer Segmentation

Organizations will not benefit from mass marketing, however will gain success through the insight of consumer segmentation. As mentioned above, the four primary segmentation variables are demographic, psychographic, geographic, and behavioral characteristics. For clarification purposes, a brief description of each is shown. Demographic segmentation separates consumers by “variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class” (Kotler & Keller, 2012, p. 216). Psychographic segmentation takes into consideration the consumer values, attitudes, and lifestyles. Geographic segmentation addresses the variables of region, climate, population growth rates and density. Lastly, behavioral segmentation considers price sensitivity, usage, brand loyalty, and attitudes. Examples of “Your Organization”’s segmentations is below, using data provided by the organization’s core operating system “Your Organization Server” (2014), effective for June 1, 2014. Demographic Segmentation

“Your Organization” is a community chartered credit union in Richmond, Virginia. The demographic information includes age, income, and gender. When accessing the age brackets for members age 12 or older, management found the primary age bracket of 47 – 65 years old at 41.8%. The chart below provides details on each age bracket. Based on this information, the credit union needs to determine how to shift the average age of our membership to 33 – 46 years of age to firmly establish a strong future membership base. Age Range

Percentage of Membership
32 – 12
15.2%
46 – 33
28.0%
65 – 47
41.8%
89 - 66
13.0%
Undetermined
2.0%

Income is another demographic item for organization’s to consider. For “Your Organization” there are three income level brackets as shown below: Income Level
Percentage of Membership
$125,000 or more
5.8%
$50,000 - $124,999
49.90%
Less than 50,000
37.40%
Undetermined
6.9%

Gender is the final demographic item the credit union reviews. Each gender is broken down within the age brackets. The credit union was originally formed to serve the Richmond employees of DuPont, leading management to the assumption of a significantly larger male percentage of members. As shown below this assumption was incorrect; thus, additional marketing focus to the female segment is ideal. Currently, the credit union focuses on large truck, motorcycle, and SUV loan target mailings, leaving the mid-size and minivan opportunities unaddressed. Age Range

Percentage of Male
Percentage of Female
32 – 12
49.46%
50.54%
46 – 33
53.11%
46.89%
65 – 47
54.23%
45.77%
89 - 66
51.59%
48.41%
Average Percentages
52.44%
47.56%

Information was available regarding the occupations of the membership; however, the disorganization of the data lead to inconclusive results. Consequently, the senior management made the decision to disregard the results from this demographic group. Geographic Segmentation

“Your Organization”, as a community charter credit union, faces the challenge of a small geographic area in which to serve consumers. Potential membership must live, work, worship, volunteer, or attend school in the counties of Chesterfield, Hanover, Henrico, and the city of...

References: “Your Organization Server”. (2014). Segmentation data. Retrieved from “Your Organization” on June 1, 2014.
Kotler, P., & Keller, K. L. (2012). Marketing management (14th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Open Solutions Incorporated. (2011). Overview analysis. Retrieved from “Your Organization” corporate library on June 1, 2014.
Strategic Business Insights. (2004, June). Segmentation in the twenty-first century: Financial behavior of the VALS segments. Retrieved from http://www.strategicbusinessinsights.com/cfd/MRsummaries/MR.VI-09.shtml.
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