Segmentation Criteria and Target MarketMarket segmentation is important when an organization is deciding how to promote its product. There are various ways that a market can be segmented. Market segmentation identifies segments of the market that are uniquely different from one another and respond differently to different marketing mixes. Segmentation is different from targeting, selecting which segments to address, and positioning, designing a marketing mix for each segment (Market Segment, n.d.).
Organizations divide a market into smaller segments of buyers with different needs and behaviors in order to reach larger markets more efficiently and effectively (Armstrong and Kotler, 2005). This is called market segmentation. The variables used in segmenting consumer markets are geographic, behavioral, demographic, and psychographic. More than one variable can be used to identify a target market. A target market is "a set of buyers sharing common needs or characteristics that the company decides to serve" (Armstong and Kotler, 2005, p.
199). Once the groups are identified, market segments are evaluated and the most attractive one is selected to serve. More than one segment can be chosen.
McDonald's is optimizing market segmentation and moving away from mass marketing to increase target groups and improve sales. The segmentation criteria that will impact McDonald's target market is a combination of demographic segmentation and psychographic segmentation. The target market selected is socially active teenagers. The following shows the segmentation variables identified:Demographics:Ã¢ÂÂ¢Age: 15-19 yearsÃ¢ÂÂ¢Employment: Part-time jobsÃ¢ÂÂ¢Gender: Male and femaleÃ¢ÂÂ¢Education: High school studentÃ¢ÂÂ¢Income: Less than $10,000 per yearPsychographics:Ã¢ÂÂ¢Enjoys social events with friendsÃ¢ÂÂ¢Attends sporting events at high schoolÃ¢ÂÂ¢Likes fast-food restaurantsÃ¢ÂÂ¢Listens to rock musicÃ¢ÂÂ¢Low concern for healthy foodsÃ¢ÂÂ¢Likes video games and internetÃ¢ÂÂ¢Watches TVÃ¢ÂÂ¢Reads magazinesThe segmentation variables were identified and the market was segmented. Profiles of the segments were made. The attractiveness of each segment was evaluated and the target segment was chosen. McDonald's hopes to...