SEGMENTING AND TARGETING MARKETS
In the 1960 numerous companies begun using market segmentation. Until then, most companies would make only one type of product and targeted it to the entire market. This way of distributing the products was not as effective as segmenting markets. Segmenting markets allows companies to produce different types of goods in different amounts and aim them to a specific demographic of consumers. This strategy allows a company to reach a wider scope of preferences and needs, thus increasing the chances of a company to make as much money as they can.
There are certain bases that must be met in order for a business to have a successful segmentation of consumer markets. The segmentation must be based on variables, single or variable. Single variables tend to be easier because the company has to make only one change and it could be based on group age, gender,ethnicity etc. Multiple-variable segmentation is much more precise and common. Usually it is easier to change more than one thing in the market(e.g. Age and gender). The most used variables that consumer markets use are demographics, psycho-graphics, geography, usage rate etc.
Multiple-variable segmentation is frequently used by apparel retailers such as Zara. Zara has many stores throughout the world and it appeals to different types of people, so segmenting markets is a must. This company segmented its markets based on geographic and demographic features. The various locations of Zara stores fall into different climate zones, with different market sizes and densities. Based on these differences, the retailer decides the types of products and the amount of products that it needs to make at certain times. Meanwhile, the retailer is also considering the age, gender, ethnicity and finances. They use this to decide how they distribute their products and at what price they will sell them. For example, TRAFA line that has as its intended consumers teenagers is cheaper that the Basic line, which is intended for professionals. Also, the prices for the same products in Manhattan are different from the ones in Paris etc.
These factors and many more decide how the markets are segmented.
Businesses use marketing to promote their products and get consumers buy them. These consumers are sometimes other businesses or organizations. In this case, companies use business marketing to promote their products. Sometimes the products that are sold through business marketing are intermediate goods and services and other times they are finished, consumer goods. The difference is that these consumer goods are sold in rather large quantities to one buyer for public use. Companies that produce electronic supplies frequently sell their goods and services to individuals that need them for personal use and to organizations and businesses that need them for other reasons. 