Week 13 - Chapter 8: Segmenting and Targeting Markets

"Market segmentation plays a key role in the marketing strategy of almost all successful organizations."

Targeting the right market is critical since all subsequent marketing decisions will be directed toward satisfying the needs of chosen customers. But what approach should be taken to select markets the company will target?

One approach is to target at a very broad level (undifferentiated targeting) by viewing the market as consisting of all customers who have a basic need that must be satisfied. For example, one could consider the beverage market or Coca-Cola in this case as consisting of all customers who want to purchase refreshment products to solve a thirst need. While this may be the largest possible market a company could hope for (it would seem to contain just about everyone in the world) in reality there are no commercial products that would appeal to everyone in the world since individual nutritional needs, tastes, purchase situations, economic conditions, and many other issues lead to differences in what people seek to satisfy not only their thirst but other needs as well.

Because people are so different and seek different ways to satisfy their needs, nearly all organizations, whether for-profits or not-for-profits, industrial or consumer, domestic or international, must have a Market Segmentation approach to target marketing. This approach divides broad markets, consisting of customers possessing different characteristics, into smaller market segments in which customers are grouped by characteristic shared by others in the segment. To successfully target markets using a segmentation approach, organizations such as Coca-Cola engage in steps which include the following:

1. Identify segments within the overall market
2. Choose the segment that fits best with the organization’s objectives and goals
3. Develop a marketing strategy that appeals to the selected target market

Coca-Cola has a portfolio of more than 3,500 beverages, from diet and regular sparkling beverages to still beverages such as fruit juices and fruit drinks, waters, sports and energy drinks, teas and coffees, and milk-and soy-based beverages and offers them in over 200 countries. The target market of Coca-Cola is not limited to age, area or gender, it is present globally and serves people at offices, homes, parties, restaurants, bars and any place you can have people even in the middle of nowhere at times. It usually represents itself as a market for the younger generations but products are also offered specifically for older people.

At the end of day, the ultimate goal of the Coca-Cola Company is of course to make a profit from as many markets as possible but more importantly it is also for all the consumers in these markets to: