(This article is an excerpt from the soon-to-be-launched 2nd edition of the book “Marketing Plan: Building the Profitable Preferred Brand” co-authored with Chiqui Escareal-Go.) 
Market segmentation is the partitioning of a market into small parts. By identifying different groups of people with fairly similar needs, a firm can try to satisfy customers better and more profitably when assembling a marketing mix to reach aparticular market segment. Using a decision tree, a market can be divided into users and non-users. In the banking industry, leading banks such as BDO, Metro Bank and BPI are market-driven, meaning, their strategies are mostly focused on the served market, while BanKO is catering to the underserved and unserved market, via what is known as market-driving strategies.
Johnson and Johnson chose the toiletry segment instead of the cosmetic segment for their face powder. Instead of coming up with many powder shades as in cosmetics, they came up with a basic natural color powder that can be used daily.
Sodexo’s primary target market are the top corporations, making use of their gift certificates as employee benefits, sales force incentives or prizes for consumers.
As the first hot yoga studio to provide infrared heaters and special yoga floors, Yoga+ is the first yoga studio in Bonifacio Global City, enabling them to tap not just health-conscious individuals but also corporate markets that would like to create a healthy and productive workforce.
Nestle has identified two segments of the ice cream market as bulk (or those traditionally consuming one gallon or half gallon ice creamat home), and impulse or the “frozen delights” kind consumed at the point of purchase where there are many low cost variants.
Gingersnaps first focused on the kids segment before expanding to the tweens and teens market via a sister brand, Just G.
Market leader Concepcion Durables Inc., the maker of Condura refrigerators, has their “Negosyo” segment for small home businesses with the biggest freezer space for its two-door refrigerator and the biggest chiller space for its one-door version.  Within the “Negosyo” segment are sub-segments, including low price models for micro businesses, where the latter can be served potentially via a leasing revenue model.  They also have the “Designer” segment which caters to consumers and home businesses.
With the exception of common benefits, it makes no sense for a firm to try to target different segments with exactly the same marketing mix efforts. Take a popular high-end drive-in hotel (more popularly known as a motel) for example. They have been offering party packages using their existing rooms, which may turn off their existing core clients needing not only privacy but also discreetness in violation of the market segmentation principle. Even Ginebra San Miguel, with its mass based appeal,has different advertising campaigns for different target groups when it came out with GSM Blue and Antonov, two products with lower alcohol content targeting the younger and entry level drinker segment.
The Del Monte 202 line targeted the outside-home consumption segment which is different from their traditional in-home drinkers used to their large cans. This enabled them to serve the same segment as the soft drink consumers, who may be looking for a healthier alternative. Instead of housewives, the 202 targets yuppies and teenagers and with these changes in target customers, the whole personality also changes to a younger, upbeat type.
Colgate, on the other hand, while dominant in the therapeutic segment launched Colgate Mintirinse, a semi-cosmetic brand to eat up some shares of Close-Up, especially knowing that the cosmetic segment is a growing segment of the toothpaste market.
French Baker has upscale consumers as their prime segment but also caters to the price sensitive shoppers with their 50% discount offered half an hour before closing time to dispose of the day’s remaining items, a perfect reinforcement to their positioning “Your Freshness Baker”.
Before a market can be segmentized, it is important to strike a meaningful balance between a broad market definition and a manageable market definition. For instance, the television broadcasting companies are in the “entertainment” market, which also consists of theaters, cinemas and theme parks. This is a fairly broad definition. A more manageable definition for the television broadcasters is to define their market as the ‘home entertainment’ market. This could then be further refined into pre-school, child, teenager, family, or adult home entertainment market.

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About the Author

JOSIAH GO is the chairman and chief marketing strategist of Mansmith and Fielders, Inc., market leader in marketing and sales training.  For Josiah Go’s live seminar appearances, please log on to www.mansmith.net. He can be contacted at josiah@mansmith.net.

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