Connecting with

Customers
Identifying Market Segments and Targets

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 Learning Issues for Chapter Eight

1. What are the different levels of market segmentation?

2. In what ways can a company divide a market into segments?

3. What are the requirements for effective segmentation?

4. How should business markets be segmented?

5. How should a company choose the most attractive target

markets?

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 Importance of Market Segmentation

• Companies cannot connect with all customers in large, broad, or diverse

markets.

• A company then needs to identify which market segments it can serve

effectively.

• This decision requires a keen understanding of consumer behavior and

careful strategic thinking.

• To develop the best marketing plans, managers need to understand what

makes each segment unique and different.

• Identifying and satisfying the right market segments is often the key to
marketing success.

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 Target Marketing

• To compete more effectively, many companies are now

embracing target marketing.

• Effective target marketing requires that marketers:

a. Identify and profile distinct groups of buyers who differ in their
needs and Preference (market segmentation).
b. Select one or more market segments to enter (market
targeting).
c. For each target segment, establish and communicate the
distinctive benefit(s) of the company’s market offering (market
positioning).

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 Bases for Segmenting Consumer Markets

• Market segmentation divides a market into well-defined

groups.

• A market segment consists of a group of customers who

share a similar set of needs and wants.

• The marketer’s task is to identify the appropriate number and

nature of market segments and decide which one(s) to
target.

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 Bases for Segmenting Consumer Markets

• There are two broad groups of variables are used to segment

consumer markets.

a. Descriptive characteristics: geographic, demographics, and

psychographic.

b. Behavioral considerations: consumer responses to benefits,

usage occasions, or brands.

• Regardless of which type of segmentation scheme we use,

the key is adjusting the marketing program to recognize
customer differences.

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 Table 8.1: Major Segment Variables for Consumer
Markets

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 Table 8.1 Major Segment Variables for Consumer
Markets (cont’d)

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 Geographic Segmentation

• Geographic segmentation calls for dividing the market into

different geographical units such as nations, states, regions,
counties, cities, or neighborhoods.

• The company can operate in one or a few areas, or operate in

all but pay attention to local variations.

• In that way, it can tailor marketing programs to the needs

and wants of local customer groups in trading areas,
neighborhoods, and even individual stores.

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 Example of Geographic Segmentation

Procter & Gamble—In China, P&G’s customer

research managers discovered that while low
prices help sales in villages, it is also important
to develop products that are consistent with
cultural traditions. Thus, urban Chinese pay
more than $1 for Crest toothpaste with exotic
flavors such as Icy Mountain Spring and Morning
Lotus Fragrance; while those in the villages
prefer 50-cent Crest Salt White since many rural
Chinese believe that salt whitens teeth. Such
geographic segmentation is also practiced for its
Olay moisturizing cream, Tide detergent, Rejoice
shampoo, and Pampers diapers.

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 Geographic Segmentation: Grassroots Marketing

In a growing trend called grassroots marketing, such activities

concentrate on getting as close and personally relevant to
individual customers as possible.

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 Geographic Segmentation: Grassroots Marketing

Hewlett-Packard—Hewlett-Packard positions itself as a company implementing “e-inclusion,”—

the attempt to help bring the benefits of technology to the poor. Toward that end, HP began a
three-year project designed to create jobs, improve education, and provide better access to
government services in the Indian state of Kuppam. Working with the local government, as well as
a branch of HP Labs based in India, the company, through grassroots marketing, provides the rural
poor with access to government records, schools, health information, crop prices, and so on. Its
hope is to stimulate small, tech-based businesses. Not only does this build goodwill and the HP
brand in India, it also helps the company discover new, profitable lines of business.

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 Geographic Segmentation: Regional Marketing

• More and more, regional marketing means marketing right

down to a specific district.

• Some companies use mapping software to show the

geographic locations of their customers.

• By mapping the densest areas, the retailer can resort to

customer cloning, assuming that the best prospects live
where most of his customers come from.

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 Geographic Segmentation: Regional Marketing

• Some approaches combine geographic data with demographic

data to yield even richer descriptions of consumers and
neighborhoods.

• Called geo-clustering, it captures the increasing diversity of

the population.

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 Using Data Mining to Determine Shopper Profiles
(Circle K in Hong Kong)

Hong Kong convenience store chain, Circle K, uses data mining to find out the purchase
profile of shoppers in different geographic area. Each outlet carries different items depending
on the profile

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 Demographic Segmentation

In demographic segmentation, we divide the market by

variables such as age, family size, family life cycle, gender,
income, occupation, education, religion, race, generation,
nationality, and social class.

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 Reasons for Popularity of Demographic
Segmentation
• First, consumer needs, wants, usage rates, and product and
brand preferences are often associated with demographic
variables.

• Second, demographic variables are easier to measure.

• Even when the target market is described in non-

demographic terms (say, a personality type), the link back to
demographic characteristics is needed to estimate the size of
the market and the media that should be used to reach it
efficiently.

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 Age and Life-Cycle Stage

• Consumer wants and abilities change with age.

• Nevertheless, age and life cycle can be tricky variables.

• The target market for some products may be the

psychologically young.

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 Life Stage

• People in the same part of the life cycle may differ in their life
stage.

• Life stage defines a person’s major concern, such as going through

a divorce, going into a second marriage, taking care of an older
parent, deciding to cohabit with another person, deciding to buy a
new home, and so on.

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 Gender

• Gender differentiation has long been applied in clothing,

hairstyling, cosmetics, and magazines.

• Men and women tend to have different attitudinal and

behavioral orientations, based partly on genetic make-up and
partly on socialization

• Examples:
– Women tend to be more communal-minded and men tend to be
more self-expressive and goal-directed.
– Men often like to read product information; women may relate to
a product on a more personal level.

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 Gender Segmentation

The beauty industry in Japan—Japanese women continue to sustain the beauty business.
Tokyo’s fashionable Marunouchi business district has seen beauty outlets sprouting. One such
outlet, Café de Make-up, specifically targets office ladies. It offers them an orange seat, a cup of
coffee, a choice of five colors of nail polish or lipstick, the services of a beauty advisor, and a
chance to apply make-up at leisure at a vanity table for a low price of 500 yen. Men are also a
fast-growing segment in the beauty market. Mandom, one of Japan’s leading makers of men’s
cosmetics, says that sales of face care products like cleansing gels, toning lotions, and mud packs
are strong and growing. One explanation for this is the slew of boyish, clean-cut actors and pop
singers who have become the rage among young Japanese women. These celebrities have been
engaged as endorsers of more and more beauty products.

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 Income

• Income segmentation is a long-standing practice in product and

service categories.

• Increasingly, companies are finding their markets are hourglass-

shaped as middle-market consumers migrate toward both discount
and premium products.

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 Example of Income Segmentation: Banyan Tree

Banyan Tree—Singapore’s Banyan Tree, famous for

its upmarket pampering with a distinctive Asian
touch, runs a multimillion dollar spa resort in
Bahrain, where money is no object to guests. Set in
a lush oasis, next to Bahrain’s Formula One motor-
racing circuit and a wildlife reserve, the spa resort
has been billed as the ultimate in exclusivity and
luxury. Catering to the “blank check” segment, the
spa resort has 78 villas with traditional Middle
Eastern design, private open-air swimming pools,
oversized infinity bathtubs, and sprawling master
bedrooms. To deliver the ultimate level of privacy,
guests, if they wish, can be kept away from view of
other guests. Besides the high-end Banyan Tree
resorts, it also has the Angsana Hotels and Resorts
that are more affordable.

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 Example of Income Segmentation: Kraft in Rural
Indonesia

Kraft—In Indonesia, consumer goods companies are adapting their marketing strategies to target
this group of consumers. Although tastes are becoming more Westernized, rural consumers are
still extremely price sensitive. Television ads are thus adapted to make the products more
approachable and affordable. These ads are increasingly peppered with rural scenes and down-to-
earth-looking characters peddling products in small-pack sizes. Kraft’s confectionery and cheese
products are sold by 1 million outlets throughout Indonesia. Its Bisquat milk biscuits sells more
than 200 million packets each month. The small packets costs 500 rupiah (6 cents) and are also
available in a softcake version called bolu. Kraft has researched on the Indonesian rural
consumers. A typical young Indonesian boy’s dietary and personal preferences meant he requires
snacks four times a day, of which two may be served outside the home. Hence, Kraft offers
products in biscuit and softcake forms, and in smaller packages to be sold at snack kiosks in towns
and villages.

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 Generation

• Each generation or cohort is profoundly influenced by the times in

which it grows up.

• Demographers call these groups cohorts.

• They share similar outlooks and values.

• Marketers often advertise to a cohort by using the icons and

images prominent in their experiences.

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 Gen Y

• A generation group of interest to marketers is the Gen Y.

• Because Gen Y members are often turned off by overt

branding practices and “hard sell,” marketers use different
approaches to reach and persuade them.

• These include online buzz, student ambassadors, product

placements in computer games, and sponsoring cool events.

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 Gen Y in China

China’s Gen Y are more entrepreneurial, more Internet connected, and know more about Westerners
than Westerners know about them.

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 Psychographic Segmentation

• Psychographics is the science of using psychology and

demographics to better understand consumers.

• In psychographic segmentation, buyers are divided into

different groups on the basis of psychological/personality
traits, lifestyle, or values.

• People within the same demographic group can exhibit very

different psychographic profiles.

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 Psychographic Segmentation

• One of the most popular commercially available classification

systems based on psychographic measurements is Strategic
Business Insights’ VALSTM framework.

• VALS classifies adults into eight primary groups based on

personality traits and key demographics.

• The segmentation system is based on responses to a

questionnaire featuring four demographic and 35 attitudinal
questions.

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 Four groups with HIGHER resources

1. Innovators—Successful, sophisticated, active, and “take-

charge” people with high self-esteem. Purchases often reflect
cultivated tastes for relatively upscale, niche-oriented
products and services.

2. Thinkers—Mature, satisfied, and reflective people who are

motivated by ideals and value order, knowledge, and
responsibility. Favor durability, functionality, and value in
products.

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 Four groups with HIGHER resources

3. Achievers—Successful career- and work-oriented people who

value consensus and stability. They favor established and
prestige products that demonstrate success to their peers.

4. Experiencers—Young, enthusiastic, and impulsive people

who seek variety and excitement. Spend a comparatively
high proportion of income on fashion, entertainment, and
socializing.

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 Four groups with LOWER resources

1. Believers—These consumers are conservative, conventional,

and traditional. They prefer familiar, established brands and
staying loyal to them.

2. Strivers—These consumers are trendy and fun-loving. They

seek the approval of others. However, because they have
fewer resources, they emulate the purchases of those with
more wealth by buying stylish products.

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 Four groups with LOWER resources

3. Makers—Focusing on their work and home, these consumers

are pragmatic, self-sufficient, traditional, and family-
oriented. As such, they favor functional products.

4. Strugglers—Loyal to their favorite brands, these elderly

consumers are passive and display a sense of resignation.
They are concerned about change.

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 Behavioral Segmentation

In behavioral segmentation, buyers are divided into groups on

the basis of their knowledge of, attitude toward, use of, or
response to a product.

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 Needs and Benefits

• Not everyone who buys a product has the same needs or

wants the same benefits from it.

• Needs-based or benefits-based segmentation is a widely used

approach because it identifies distinct market segments with
clear marketing implications.

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 Needs and Benefits Segmentation – P&G

Procter & Gamble, for instance, has

different shampoo brands according to
the needs of each segment.

• Head & Shoulders is for those who

need to control their dandruff problem;

• Pantene is for those who want to

protect their hair from environmental Procter & Gamble offers a range of
damage from the sun; shampoo brands that satisfies
different hair care needs.

• Rejoice is for those who want a mild

shampoo for everyday use.
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 Decision Roles

• It is easy to identify the buyer for many products.

• People play five roles in a buying decision: initiator,

influencer, decider, buyer, and user.

• Different people are playing different roles, but all are crucial
in the decision process and ultimate consumer satisfaction.

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 User and Usage—Real User and Usage-related
Variables
Many marketers believe that behavioral variables—occasions,
benefits, user status, usage rate, loyalty status, buyer-
readiness stage, and attitude—are the best starting points for
constructing market segments.

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 Occasions

• Occasions are determined by a time

of day, week, month, year or other
well-defined temporal aspects of a
consumer’s life.

• Buyers can be distinguished

Occasions are another way to segment
according to the occasions when the market. In Japan, marketers
celebrate different occasions with
they develop a need, purchase a appropriate promotions.
product, or use a product.

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 Occasions

• For example, air travel is triggered by occasions related to

business, vacation, or family.

• Occasion segmentation can help firms expand product usage.

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 User Status

• Markets can be segmented into non-users, ex-users, potential

users, first-time users, and regular users of a product.

• Each will require a different marketing strategy.

• The key to attracting potential users, or even possibly nonusers, is

understanding the reasons they are not using.

• Market-share leaders tend to focus on attracting potential users

because they have the most to gain.

• Smaller firms focus on trying to attract current users away from the
market leader.

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 Usage Rate

• Markets can be segmented into light, medium, and heavy

product users.

• Heavy users are often a small percentage of the market but

account for a high percentage of total consumption.

• Marketers would rather attract one heavy user than several

light users.

• A potential problem is that heavy users are often either

extremely loyal to one brand, or never stay loyal to a brand
and are always looking for the lowest price.

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 Usage Rate—The Chinese Internet Market

Chinese Internet market—Consulting firm McKinsey found

seven consumer segments among Internet users in China. The
Traditionalists spend a large portion of their media time on
traditional forms such as television and are less likely to own or
want to own other digital devices. They are less educated than
the rest of the Internet users and many live in smaller cities. The
Digital Junkies are the most intensive Internet users. They spend
more than 34 hours a week with digital media compared with an
average of 15.8 hours for all users. They are young and are The Digital Junkies are the most
always on the lookout for the latest gadget. Another segment is intensive Internet users among
the Gamers who spend most of their time on PC games and are the Chinese. They spend more
heavy users of social networks. Mobile Mavens are heavy mobile- than 34 hours a week with digital
Internet users, preferring listening to music and reading. Info- media compared to the average
centrics look for information to increase productivity at work. of 15.8 hours.
Basic Users spend the least amount of time online, and play
games on mobile phones. Finally, the Traditionalists are light
users of the Internet. They have little interest in high-tech
devices and spend more time watching television.

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 Buyer Readiness Stage

• Some people are unaware of the product, some are aware,

some are informed, some are interested, some desire the
product, and some intend to buy.

• To help characterize how many people are at different stages

and how well they have converted people from one stage to
another, some marketers employ a marketing funnel.

• See Figure 8.1: The Brand Funnel.

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 Figure 8.1: The Brand Funnel

The relative numbers of consumers at different stages make a big difference

in designing the marketing program.

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 Loyalty Status

Buyers can be divided into four groups according to brand

loyalty status:
1. Hard-core loyals—Consumers who buy only one brand
all the time.
2. Split loyals—Consumers who are loyal to two or three
brands.
3. Shifting loyals—Consumers who shift loyalty from one
brand to another.
4. Switchers—Consumers who show no loyalty to any
brand.

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 Marketing Applications

A company can learn a great deal by analyzing the degrees of

brand loyalty:
i. By studying its hard-core loyals, the company can identify its
products’ strengths;

ii. By studying its split loyals, the company can pinpoint which
brands are most competitive with its own; and

iii. By looking at customers who are shifting away from its brand,
the company can learn about its marketing weaknesses and
attempt to correct them.

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 Attitude

Five attitude groups can be found in a market:

1.enthusiastic,
2.positive,
3.indifferent,
4.negative,
5.and hostile.

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 Multiple Bases

• Combining different behavioral bases can help to provide a

more comprehensive and cohesive view of a market and its
segments.

• Figure 8.2 depicts one possible way to break down a target

market by various behavioral segmentation bases.

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 Figure 8.2: Behavioral Segmentation Breakdown

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 Bases for Segmenting Business Markets

• Business markets can be segmented with some of the same

variables used in consumer market segmentation, such as
geography, benefits sought, and usage rate, but business
marketers also use other variables.

• Table 8.2 shows one set of these. The demographic variables

are the most important, followed by the operating variables.

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 Table 8.2: Major Segmentation Variables for
Business Markets

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 Table 8.2: Major Segmentation Variables for
Business Markets (cont…)

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 Marketing Applications of Business Segmentation

• The table lists major questions that business marketers

should ask in determining which segments and customers to
serve.

• Within a chosen target industry, a company can further

segment by company size. The company might set up
separate operations for selling to large and small customers.

• Within a given target market industry and customer size, a

company can segment further by purchase criteria.

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 Segmenting Business Markets

• Business marketers generally identify segments through a

sequential process.

• The company first undertook macrosegmentation.

• It looked at which end-use market to serve: automobile, residential,

or beverage containers.

• It chose the residential market, and it needed to determine the

most attractive product application: semi-finished material, building
components, or aluminum mobile homes.

• Deciding to focus on building components, it considered the best

customer size and chose large customers.
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 Segmenting Business Markets

• The second stage consisted of microsegmentation.

• The company distinguished among customers buying on

price, service, or quality.

• Because it had a high-service profile, the firm decided to

concentrate on the service-motivated segment of the market.

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 Segmenting Business Markets

• Business-to-business marketing experts Anderson and Narus

have urged marketers to present flexible market offerings to
all members of a segment.

• A flexible market offering consists of two parts: a naked

solution containing the product and service elements that all
segment members value, and discretionary options that some
segment members value.

• Each option might carry an additional charge.

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 Market Targeting

• Once the firm has identified its market-segment

opportunities, it has to decide how many and which ones to
target.

• Marketers are increasingly combining several variables in an

effort to identify smaller, better-defined target groups.

• This has lead some researchers to advocate a needs-based

market segmentation approach.

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 Table 8.3: Steps in the Segmentation Process

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 Effective Segmentation Criteria

1. Measurable—The size, purchasing power, and characteristics

of the segments can be measured.

2. Substantial—The segments are large and profitable enough

to serve. A segment should be the largest possible
homogeneous group worth going after with a tailored
marketing program.

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 Effective Segmentation Criteria

3. Accessible—The segments can be effectively reached and

served.

4. Differentiable—The segments are conceptually

distinguishable and respond differently to different
marketing-mix elements and programs.

5. Actionable—Effective programs can be formulated for

attracting and serving the segments.

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 Porter’s Five Forces Model and Segment
Attractiveness
Michael Porter has identified five forces that determine the
intrinsic long-run attractiveness of a market or market
segment: industry competitors, potential entrants, substitutes,
buyers, and suppliers.

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 Porter’s Five Forces Model and Segment
Attractiveness
1. Threat of intense segment rivalry—A segment is unattractive
if it already contains numerous, strong, or aggressive
competitors.

2. Threat of new entrants—The most attractive segment is one

in which entry barriers are high and exit barriers are low.

3. Threat of substitute products—A segment is unattractive

when there are actual or potential substitutes for the
product. Substitutes place a limit on prices and on profits.

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 Porter’s Five Forces Model and Segment
Attractiveness
4. Threat of buyers’ growing bargaining power—A segment is
unattractive if buyers possess strong or growing bargaining
power.

5. Threat of suppliers’ growing bargaining power—A segment is

unattractive if the company’s suppliers are able to raise
prices or reduce quantity supplied.

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 Evaluating and Selecting the Market Segments

• In evaluating different market segments, the firm must look

at two factors:
– The segment’s overall attractiveness and
– The company’s objectives and resources

• Does a potential segment have characteristics that make it

generally attractive, such as size, growth, profitability, scale
economies, and low risk?

• Does investing in the segment make sense given the firm’s

objectives, competencies, and resources?

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 Possible Levels of Segmentation

• Marketers have a range or continuum of possible levels of

segmentation that can guide their target market decisions.

• As Figure 8.3 shows, at one end is a mass market of

essentially one segment; at the other are individuals or
segments of one person.

• Between lie multiple segments and single segments.

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 Figure 8.3: Possible Levels of Segmentation

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 Full Market Coverage

• The firm attempts to serve all customer groups with all the products
they might need.

• In undifferentiated marketing, the firm ignores segment differences

and goes after the whole market with one offer.

• In differentiated marketing, the firm operates in several market

segments and designs different products for each segment.

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 Full Market Coverage

Samsung—Its climb to be the second largest

mobile phone maker is grounded on
understanding customer needs. Samsung realized
that it needed to design more products for people
in India, China, and other emerging markets that
are providing most of the industry’s growth. Its
research showed that there are six segments of
users based on their needs: style, infotainment,
business, multimedia, connected, and basic. The
latter two are most relevant in emerging markets.
The “connected” segment consists of people
whose main concern is communicating with family,
friends, and business associates; while people in Samsung identified six segments of mobile phone users
based on their need for style, infotainment, business,
the “basic” segment just want a low-cost device
multimedia, connection, and basic necessities. It has a
that allows them to talk and text message.
slew of mobile phones for full market coverage.

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 Undifferentiated Marketing

• In undifferentiated marketing or mass marketing, the firm

ignores segment differences and goes after the whole market
with one offer.

• It designs a product and a marketing program that will

appeal to the broadest number of buyers.

• It relies on mass distribution and advertising.

• It aims to endow the product with a superior image.

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 Undifferentiated Marketing

• Undifferentiated marketing is “the marketing counterpart to

standardization and mass production in manufacturing.”

• The narrow product line keeps down costs of research and

development, production, inventory, transportation,
marketing research, advertising, and product management.

• The undifferentiated advertising program also reduces costs.

• Presumably, the company can turn its lower costs into lower
prices to win the price-sensitive segment of the market.

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 Differentiated Marketing

• In differentiated marketing, the firm operates in several

market segments and designs different products for each
segment.

• Differentiated marketing typically creates more total sales

than undifferentiated marketing. However, it also increases
the costs of doing business.

• Because differentiated marketing leads to both higher sales

and higher costs, nothing general can be said about the
profitability of this strategy.

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 Differentiated Marketing – Lenovo

Lenovo—China’s IT service market is

estimated to grow by leaps and bounds. To
capitalize on this, Lenovo differentiated its
retail channel to reach consumer and
business customers. It doubled its chain of
1+1 Special Shops to more than 500 stores
aimed at consumers. It also established a
chain of about 400 commercial IT specialty
shops, aimed at business customers. In so
doing, Lenovo can sell bundled products like
Internet services with hardware. It can also
identify those customers, especially small-
and mid-sized businesses, who might buy Lenovo practices differentiated marketing to reach
out more effectively to consumer and business
additional services. Lenovo has two
customers.
departments working on its service
business—one on bundling, the other
offering after-sale services such as systems
integration.

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 Multiple Segment Specialization

• With selective specialization, a firm selects a subset of all the

possible segments, each objectively attractive and
appropriate.

• There may be little or no synergy among the segments, but

each promises to be a moneymaker.

• Keeping synergies in mind, companies can try to operate in

super segments rather than in isolated segments. A super
segment is a set of segments sharing some exploitable
similarity.

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 Multiple Segment Specialization

• With product specialization, the firm sells a certain product to

several different market segments. This leads to a strong reputation
in the specific product area. The downside/risk is that the product
may be supplanted by an entirely new technology.

• With market specialization, the firm concentrates on serving many

needs of a particular customer group, such as by selling an
assortment of products only to university laboratories. The firm
gains a strong reputation among this customer group and becomes
a channel for additional products its members can use. The
downside/risk is that the customer group may suffer budget cuts or
shrink in size.

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 Single-segment Concentration

• With single-segment concentration, the firm markets to only

one particular segment.

• Through concentrated marketing, the firm gains deep

knowledge of the segment’s needs and achieves a strong
market presence.

• Further, the firm enjoys operating economies through

specializing its production, distribution, and promotion.

• If it captures segment leadership, the firm can earn a high

return on its investment.

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 Tiger Motorcycles in Thailand

Tiger motorcyles—Thai entrepreneur Piti

Manomaiphibul’s Tiger motorcycles are giving Japanese
giants Honda, Suzuki, and Yamaha a run for their
money in Thailand’s lucrative motorcycle market. Tiger’s
bikes are targeted at a segment that Japanese
producers have overlooked—the thrifty, yet style-
conscious, rural rider. When Piti went to Vietnam, he
saw Chinese makers of cheap motorcycles seizing
nearly 70 percent of the market from Japanese
producers. He decided to make a mid-priced bike as
good as the Japanese and much better than the Chinese
models. Tiger is positioned against Japanese brands on
two of the latter’s weak spots— cost and design. Tiger
motorbikes are produced at 20 percent less than
Japanese bikes without sacrificing quality. Among its
models are Ozone 3, a basic model aimed at rural
student riders, a high-performance bike for riders who
crave powerful but affordable bikes, and Nano, a
minimotorcyle for children.

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 Niche Marketing

• A niche is a more narrowly defined customer group seeking a

distinctive mix of benefits within a segment. Marketers
usually identify niches by dividing a segment into sub-
segments.

• Niche marketers aim to understand their customers’ needs so

well that customers willingly pay a premium.

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 Individual Marketing

• The ultimate level of segmentation leads to “segments of one,” “customized

marketing,” or “one-to-one marketing.

• As companies have grown more proficient at gathering information about

individual customers and business partners (suppliers, distributors,
retailers).

• Consumers increasingly value self-expression and the ability to capitalize

on user- generated products as well as user-generated content.

• Customization is not for every company. It may be very difficult to

implement for complex products such as automobiles.

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 Legal and Ethical Issue with Market Targets

• Market targeting sometimes generates public controversy.

• The public is concerned when marketers take unfair

advantage of vulnerable groups (such as children) or
disadvantaged groups (such as rural poor people), or
promote potentially harmful products.

• Example, the fast-food industry has been heavily criticized for

marketing efforts directed toward children.

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 Ethical Choice of Market Targets

Socially responsible marketing calls for targeting that serves not

only the company’s interests, but also the interests of those
targeted.

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Thank you