1.1: Why It Matters- Segmentation and Targeting

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Why determine market segments and target customers?

Suppose you have just accepted a product marketing job with a technology company called Chumber. You’re excited about the company and the team you’ll be working with. Chumber’s main product is an automated, fully online system for checking the references of job candidates and getting feedback from coworkers about their professional skills.

After a morning orientation session and a product demonstration on the first day, your boss gives you your first assignment: spend a half day doing research. Then come back to her with recommendations about whom Chumber should be targeting in its sales and marketing activities, and why.

After you give your boss a puzzled look, she adds, “Don’t look so worried. I already know who I think we should be targeting. But with you coming in fresh, I’d like to hear what you think. We can probably learn something from each other!”

As you sit down at your new desk, the wheels start turning in your head.

Q: What problem is Chumber’s product solving?

A: The hassle of checking references for job candidates and finding out who is really a good fit.

Q: Who has this problem?

A: Companies that hire people.

You recognize that this is a business-to-business marketing challenge, not a business-to-consumer issue. But “companies that hire people” covers a lot of ground. How effective will Chumber be if you try marketing and selling to every company in the world? And within any given company, which people would be most interested in using this product?

The question of whom to target is a foundational part of any marketing activity. Marketers use the tools of segmentation and targeting to answer this question. Segmentation helps you understand your market and divide it into groups that share common needs and characteristics. Targeting helps you figure out which of these groups to focus on in your sales and marketing activities.

As you work through this class, you will learn about segmentation, targeting, and positioning. You will also learn how these tools help you shape the marketing mix to reach your target audiences effectively.

Learning Outcomes

Describe common segmentation approaches
Explain the process of selecting an appropriate segmentation approach and deciding which customer segments to target for marketing activities

Why It Matters: Segmentation and Targeting. Provided by: Lumen Learning. License: CC BY: Attribution