Question

Assume you are the owner of a new mom and pop coffee shop that has opened in Union near Kean University. Describe which segmentation base(s) and possible segmentation variable(s) you would use to segment the market and why.

Answer 1

Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.

• Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference.
• A market segment is a small unit within a large market comprising of like minded individuals.
• One market segment is totally distinct from the other segment.
• A market segment comprises of individuals who think on the same lines and have similar interests.

Being an owner of new Mom & Pop coffee shop:

Basis of Market Segmentation:

• Gender:

The marketers divide the market into smaller segments based on gender. Both men and women have different interests and preferences, and thus the need for segmentation.

Organizations need to have different marketing strategies for men which would obviously not work in case of females.

A woman would not purchase a product meant for males and vice a versa.

The segmentation of the market as per the gender is important in many industries.

• Age Group:

Division on the basis of age group of the target audience is also one of the ways of market segmentation.

The products and marketing strategies for teenagers would obviously be different than kids.

• Income:

Marketers divide the consumers into small segments as per their income. Individuals are classified into segments according to their monthly earnings.

The three categories are:

1. High income Group
2. Mid Income Group
3. Low Income Group

Stores catering to the higher income group would have different range of products and strategies as compared to stores which target the lower income group.

Why?: Below are answers for this.

1)To Identify the target market:

The first and foremost step is to identify the target market. The marketers must be very clear about who all should be included in a common segment. Make sure the individuals have something in common. A male and a female can’t be included in one segment as they have different needs and expectations.

2)To Identify expectations of Target Audience:

Once the target market is decided, it is essential to find out the needs of the target audience. The product must meet the expectations of the individuals. The marketer must interact with the target audience to know more about their interests and demands.

3)To Create Subgroups:

The organizations should ensure their target market is well defined. Create subgroups within groups for effective results.

4)To Review the needs of the target audience:

It is essential for the marketer to review the needs and preferences of individuals belonging to each segment and sub-segment. The consumers of a particular segment must respond to similar fluctuations in the market and similar marketing strategies.

5)To Name your market Segment:

Give an appropriate name to each segment. It makes implementation of strategies easier.

A kids section can have various segments namely new born, infants, toddlers and so on.

6)To Marketing Strategies:

Devise relevant strategies to promote brands amongst each segment. Remember you can’t afford to have same strategies for all the segments. Make sure there is a connect between the product and the target audience. Advertisements promoting female toiletries can’t afford to have a male model, else the purpose gets nullified.

A model promoting a sunscreen lotion has to be shown roaming or working in sun for the desired impact.

7)To Review the behavior:

Review the behavior of the target audience frequently. It is not necessary individuals would have the same requirement (demand) all through the year. Demands vary, perceptions change and interests differ. A detailed study of the target audience is essential.

8)To Size of the Target Market:

It is essential to know the target market size. Collect necessary data for the same. It helps in sales planning and forecasting.