Mkt Segmentation Guide #1

Market segments are determined by differences in customers’ wants/needs.


Some marketing textbooks state that markets can be segmented by customers’ demographics, psychographics, geography, etc. This is wrong! What actually creates market segments are differences in target customers’ wants/needs. After the marketer figures out what wants/needs define the various segments, then the segments may be described in terms of demographics, psychographics, geography, etc.



Recognize from my first posts, which served as an introduction to these Marketing Guides, that wants/needs differ in consumer marketing compared to those in business to business marketing. In consumer marketing, wants/needs are internal to the individual; whereas, in business to business marketing, wants/needs tend to be economic in nature.

Using the toothpaste category as an example, some target customers want/need white teeth. Their internal want/need is probably a social need; that is, these target customers want hugs and kisses from attractive people. Once this want/need has been identified by the marketer, then the marketer may describe this segment demographically. The target customers tend to be both male and female; they tend to be 15 to 34 years of age, and they are unmarried. The learning point of this example is that it is the want/need that defines the market segment. Demographics do not define the segment although members of this segment tend to share similiar demographics.