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Marketing segmentation for target corporation
Outline chapter 7 market segmentation and target marketing
Segmentation marketing fundamentals
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2.4 Segmentation: Some of the important bases for segmenting consumer markets are Demographic, Geographic, benefits, Psychographic and Usage rate segmentation. Geographic segmentation is the priority of Zara. It is a global brand and its supply chain management is very much perfect. It helps Zara in getting the latest trends into stores in three weeks’ time based on consumer preferences. It’s a Spanish brand, so it would a better option for Zara to open more store in European countries. Consumers would be more interested in making their decision towards preferring Zara. It has dived its segment on the basis of gender where more preference is for women and less preference for men. It can be seen that in any Zara store there are two floor for women and 1 floor or a part of a floor for men products. For example, the store in Leeds. It focuses on women age group up to 35 years who is more concerned about having a fashionable life style. As per the psychographic segmentation, Zara consumers are more ambitious and are attracted towards fancy and trendy products. It makes products that give...
The company first needs to collect demographic and geographic information relevant to potential store location choices in order to segment its market. It is extremely important that the marketing
Many factors should be addressed when defining a target market. These factors include market segmentation, product life cycle, and the four "P's" that make the marketing mix. Market segmentation is the process of dividing a total market into market groups consisting of people who have relatively similar product wants and needs. There are four major segmentation variables: geographic, demographic, psychographic, and behavioral. Geographic segmentation includes world region, country region, city, density, or climate. Demographic segmentation can consist of age, gender, income, occupation, education, race, religion, or nationality. Social class, lifestyle, and personality fall into the psychographic segment. The behavioral segment divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product (Bethel, 2007). Once the market segment is identified, that market can be targeted.
In relation to this case, Target Corporation depicts a brand personality among its target audience. Target Corp. is considered as the retail store that caters to the younger and more educated and well-off clientele as to compare with its rival. In a survey conducted, Target Corp. shoppers fall on a 46 years old age median, mostly female, have children at home, and attended or completed college (Target Corporate Facts, 2006). Thus, the target market is perceived to be sophisticated. However, with the corporate values the corporation applies, the brand personality serves as one of its distinguishing pro.
Caroline and Jennifer said that ‘Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or set of buyers which would then become targets for the company’s marketing plans.’ (Tynan and Drayton, 1987) There are many ways to segment the market, such as age, region, environment, psychology and wages (Hall, Jones and Raffo, 2010).
The case study gives some hints on Primark’s segmentation and targeting criteria, and the following graph analyses those based the assumption that segments are mainly defined by basic on personal characteristics (demographical, socio-economical, geographical, personality or lifestyle based) and "product-related
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
The Inditex Company is a company based in Spain known as one of the most successful fashion companies in the world. Inditex’s brands include Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear, Uterque, Zara Home, and most commonly known, Zara. Zara is the oldest and biggest brand that Inditex owns. The company started as a small shop in La Coruna first named Zorba. The name was later changed to Zara because there was already a bar nearby with the name Zorba. “It wasn’t long before the brand became a huge success known for its fast fashion. Inditex is a pioneer amoung “fast fashion” company, which essentially imitate the latest fashions and speed their cheaper versions into stores” (Hansen, 2012).
Therefore their consumer promise is also the force behind the combination of their environmental and preservation guidelines used through the group 's supply chain. Zara, has been a groundbreaker in conveying new fashions, new designs, and new ideas rapidly to its stores. Zara’s tenacious thrust of on-trend products into the supply chain channel keeps its stores in stock on the latest fashions at lucrative prices. Lots of their new concepts have come from some of the fashion shows that just ended in New York, Paris and Milan will soon be on Zara’s racks.
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
Segmentation is a marketing strategy that involves separating a wide target market into small groups of customers who share the common need of using or purchasing the product that needs to be marketed. Market segmentation strategies are utilized to identify these groups of consumers and strategies are designed and implemented to make the product or service appeal to them. Support and also the product will be strategically placed in order to successfully achieve the ultimate marketing goal. Businesses and organizations may come up with different type of strategies involving different products and catchy phrases depending on the product or the target segment.
In the segmentation section the company takes into account the four bases of segmentation; geographic, demographic and psychographic and behavioural. Most prolific is the use of international idols to develop a psychographic segmentation brand management. For example, the company used Selena Gomez as its NEO style icon. The company has a very resound connection of corporate association with the different segmentation markets. Every market segment is managed by the social icon associated with it.
In order for a retail company, like Zara to produce good sales results it is dependent on the level of stock on hand. If Zara has too much inventory in a given store it can slow the stores cash flow as well as reduce profit due to markdowns. Therefore, excellent inventory control is of high importance to Zara in order to realize sales targets. Studying the open-to-buy has allowed me to realize it’s tremendous importance as well as usefulness for a buyer. As one of the two major tools of merchandise planning, the open-to-buy plan is used by many retailers today as an inventory management tool, in order to determine the quantity of inventory that needs to be bought. This is generally done on a monthly basis in order to reach revenue projections.
According to Kotler, market segmentation can be defined as ‘grouping buyers according to their separate products or their desired marketing mix (Kotler, 2013). This report will focus on the psychographic aspect of market segmentation. The concept of psychographic segmentation is defined as ‘grouping consumers according to their social class, lifestyle or personal characteristics (Kotler, 2013). Ultimately this will have a large impact on consumer behaviour towards luxury goods. Consumer behaviour is heavily impacted upon by psychographic behaviour, therefore making it an important aspect of market segmentation. Luxury goods are promoted effectively through firms’ careful consideration of consumers’ psychographic attributes.
Stakeholders are individuals, groups, and organisations with the power to influence the delivery of an organisation’s strategy and thus the organisation’s performance and/or a significant interest in an organisation’s strategy and thus the organisation’s performance (Wisniewski, 2001; Ackermann & Eden, 2011). In the context of the draft BSC to be developed, however, the analysis shall focus on relatively aggregated stakeholder groups. Firstly, the aim of this stakeholder analysis is not to pinpoint individual persons as stakeholders who may then be managed more easily than large organisations, but to identify rather broad stakeholder groups interested in Zara’s performance. Secondly, addressing
Proctor T (2000) asserts that segmentation is a marketing management tools used by firms to establish a competitive advantage. According to Miklos and Elberse (2006), Market segmentation consists of segregating a market into a number of distinct segments of potential customers; each with different and distinct behaviors, needs and characteristics. Using market segmentation, a firm can more effectively identify and target and fulfill consumer needs. Markets can be segmented either by the benefits customers seek or by an observable characteristic, like age, sex, gender or lifestyle. To illustrate both types of market segmentation, let us look at the market for running shoes, for customer wants, one particular runner may prefer trendy design