2.3 Segmentation and Targeting Introduction
Learning Objectives
- Define and explain the concepts of market segmentation and targeting
- Understand why segmentation and targeting are essential to customer-focused marketing
- Recognize how businesses use segmentation and targeting to optimize resources and improve relevance
We’ve already established that the customer is central to both marketing and business success. But how do organizations identify and connect with the right customers in a crowded marketplace?
There are two important realities to consider. First, every business operates with limited resources; no company can serve every customer equally well. Second, marketing efforts are most effective when they’re tailored to the specific needs and interests of a well-defined audience.
This is where segmentation and targeting come in.
Segmentation is the process of dividing a broader market into smaller groups of customers who share similar characteristics, needs, or behaviours.
Targeting involves evaluating those segments and selecting the most appropriate ones to pursue with customized marketing strategies[1].
Once segments are identified, businesses can use targeting to focus their marketing efforts on the most attractive and relevant segments, those most likely to benefit from and respond to their offerings. Targeting allows organizations to align their products, services, and communications more precisely with customer expectations, resulting in more efficient marketing and stronger customer relationships.
Creation notes: Chat GPT was used to format, update and shorten text to include current examples.
- Reading: Defining Your Target Market
- Kotler, P., & Armstrong, G. (2021). Principles of Marketing (18th ed.). Pearson. ↵
