Blog 4: How Companies Use Market Segmentation and Market Segments To Sell Their Products

Hi everybody! 

I hope you enjoyed my last post. Today we are going to talk about how companies use market segmentation and market segments to sell their products. Market segmentation is when you separate groups of potential buyers into smaller groups of people who share one or more characteristic or needs. These groups are called market segments and inside of these segments are people who have similar buying habits.

Companies like Nike use market segmentation to sell their different types of products. They have more than 9 different categories of sports that they cater to as well as men, women and children's gear. This means that they can segment their markets into the different sports as well as the different genders that they sell to. An example of this is how they have clothes and equipment for men and women's soccer and men and women's basketball. They even have clothes like polos and sweatshirts for people that just want to always feel comfortable while being active.

Sometimes, a company will have one product but multiple market segments for that product. Companies that publish magazines and book will usually target multiple markets. Many times these publications will have different covers, titles and even languages for the different markets. By using the same version but different covers, titles and languages companies are able to save money because they do not have to create different versions of magazines and books for the different markets. The magazine  Sports Illustrated is a good example of this because they often will have different covers for their magazines that are directed towards a certain part of the United States. When College Football had their first playoff series this past season, Sports Illustrated created a cover for each of the four teams competing in the playoff but it contained all most all of the same content. They then would send the magazine with the specific cover to whichever region that specific team was in.

Companies will sometimes products multiple products for multiple market segments. This idea tends to be more expensive because the company has to spend more money on developing, producing and advertising all of the multiple products. While you are spending more money to create the product, you can make more money if solve the customers needs. The shoe company, Vans, has multiple products that they sell to different markets. They have snowboard boots, flip-flops, boat shoes, classic skate boarding shoe, shoes for men, women and children. Over the past years, they have started to sell clothing as well. This has allowed Vans to target many different markets and still make money.

The last strategy that I am going to cover is called segments of one, or mass customization. Mass customization is when companies tailor goods to the tastes of individual customers on a high-volume scale. The sunglass company that I mentioned in my last post, Knockarounds, allows their customers to create their own custom pair of sunglasses through their website. First you decide if you want their Premium style or the Fort Knock style. Personally, I prefer the Premium style but it all depends on the person. Then you go on to pick what color you want the left arm, next you pick the right arm's color, then the color for the front of the glasses and finally the lens color and if you want it to be polarized or not. This allows you to have many different options to chose from. You can even let the computer randomize your design.


Knockaround CUSTOM from Ace Moyer on Vimeo.


Thank you for reading this post and I hope you enjoyed it!

See you soon!
Chris


References:

"Custom Premium Sunglasses." Knockaround Sunglasses RSS. N.p., n.d. Web. 01 Mar. 2015. 
Kerin, Roger A., Steven W. Hartley, and William Rudelius. Marketing. 11th ed. New York, NY: McGraw-Hill/Irwin, 2013. Print. 

Knockaround CUSTOM. 2012. Vimeo. Web. 1 Mar. 2015. 

Nike Basketball Shoes. Digital image. N.p., n.d. Web. 1 Mar. 2015. 

Nike Magista Cleat. Digital image. N.p., n.d. Web. 1 Mar. 2015. 

Sports Illustrated College Football Playoff Covers. Digital image. N.p., 22 Dec. 2014. Web. 1 Mar. 2015. 

Vans. Digital image. N.p., n.d. Web. 1 Mar. 2015. 

"What Is Market Segment? Definition and Meaning." BusinessDictionary.com. N.p., n.d. Web. 01 Mar. 2015.