Market Segmentation: Identifying & Serving Consumer Needs Effectively - Essay Sample

Introduction

A market segment refers to a subgroup of organizations or people who share one or more characteristics, and hence have similar product needs. Market segmentation is the process through which a market is divided into small and identifiable groups or segments. The process enables organizations to identify and study groups of customers with shared needs, design suitable marketing mixes, and define marketing objectives more accurately (Dolnicar et al., 2018). For market segmentation to be effective, it must be sustainable, identifiable, accessible, and responsive. Advertisement is among the most effective marketing tools, and therefore greatly incorporates segmentation. By doing so, the organization focusses its advertisement on particular market sub-groups. Advertisements built on market segmentation help the organization gain a commercial advantage over rivals who favor the one-size-fits-all marketing approach. Segmentation is visible in the advertisement in the case under study. Its purpose is to target specific groups of consumers that have similar needs, preferences, characteristics, and interests. By doing so, the advertisement aims to elicit a response from the target group, which will, in turn, raise the sales of Ecosport Ford. Ultimately, the organization will get value for its investment in the advertisement as revenue grows.

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Demographic Segmentation

Various bases are used in segmenting markets. They include psychographic, geographic, and demographic, behavioral and benefits sought. At least three bases of segmentation can be seen in the advertisement. First, there is demographic segmentation. This base seeks to segment the population in terms of gender, age, family size, income, among others (Sarvari et al., 2016). The base is built on the premise that since people in the population have different characteristics, their needs are also different. Ecosport is the first-ever compact SUV launched by Ford Motor Company. As such, the product is targeted at consumers with small family sizes. Such families can use the car for trips and long vacations with whole luggage comfortably. To prove this, the advert states, "Feels like family, for a change." Therefore, the advert points towards the suitability and effectiveness of the car in satisfying the needs of this particular population aiming to increase their interest in the product.

From the advertisement, it can also be deduced that the model is made particularly for empty nesters and millennials. The compact design of the car, especially, resonates well with the millennials who prefer small packages fitted with the latest technologies and different amenities, just like in Ecosport. To this generation, the model is manageable but also gives room for all the things they love. Though small, it allows them to live big. The price of the car is also indicated in the advert. It indicates that the car is targeted at people who would like to drive SUVs but cannot afford the normal SUVs. As per the advert, the car sells at between 7 and 8 Lakh. Therefore, the product is meant for the middle-income or the entry-level utility vehicle segment. The color of the car may mean that the advert is targeted to females, though men also drive cars of such colors.

Psychographic Segmentation

The advert also heavily employs psychographic segmentation. Using this segmentation, the organization targets the psychological characteristics of the consumers, their unconscious and conscious motivations, motivations, among others (Liu, et al., 2019). As intimated earlier, the car model targets millennials and empty nesters. The two populations share several psychographic characteristics. They both are active, outgoing, optimistic, and love their freedom. The Ecosport allows them to enjoy this kind of freedom. The freely and highly flying kites in the advert are symbols of this freedom. It has been observed that millennials prefer spending more time and experiences with people they love rather than buying more stuff. The product also looks modern, sporty, and premium features that matter greatly in this population. The Ecosport, therefore, directly serves this lifestyle.

Behavioral Segmentation

Under this base of segmentation, marketers target the perceived benefits of using the product, usage rate, awareness state, among other factors (Zaheer & Kline, 2018). For Millenials, cars are loved for their functional benefit and not solely as a status symbol. Therefore, they do not see value in paying for surplus options or quality inclusions such as a big motor. This pricing of the car as indicated in the advert addresses this concern since the price is lower than other products in the market. The size of the car, as shown in the advert, also speaks to this belief. Cars in this population are mostly for movement from one point to another, and the "Go Further" logo in the advert address this. However, though aspects of the advert point towards behavioral segmentation, this base is difficult to implement due to the complexity associated with its measurement. It is not as objective as the demographic variables and hence is often subjective.

Conclusion

The advert is a perfect example of how market segmentation is used to appeal to specific populations. The words, symbols, figures, and pictures used in the advert have various aspects of demographic, psychographic, and behavioral segmentation. These features are meant to appeal to the target market which comprises of millennials, young families, and empty nesters.

References

Dolnicar, S., Grun, B., & Leisch, F. (2018). Market segmentation analysis. Market Segmentation Analysis, 11-22. Retrieved from https://link.springer.com/chapter/10.1007/978-981-10-8818-6_2

Liu, H., Huang, Y., Wang, Z., Liu, K., Hu, X., & Wang, W. (2019). Personality or Value: A Comparative Study of Psychographic Segmentation Based on an Online Review Enhanced Recommender System. Applied Sciences, 9(10), 1992. Retrieved from https://www.mdpi.com/2076-3417/9/10/1992

Sarvari, P., Ustundag, A., & Tacki, H. (2016). Performance evaluation of different customer segmentation approaches based on RFM and demographics analysis. Kybernetes. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/K-07-2015-0180/full/html

Zaheer, N., & Kline, M. (2018). Use of Lifestyle Segmentation for Assessing Consumers' Attitudes and Behavioral Outcomes towards Mobile Advertising. Market-Trziste, 30(2), 213-229. Retrieved from https://hrcak.srce.hr/213176