Page 162 - Foundations of Marketing

Target Markets: Segmentation and Evaluation | Chapter 5 129

Benefi t segmentation is the division of a market according to benefits that consumers
want from the product. Although most types of market segmentation assume a relationship
between the variable and customers’ needs, benefit segmentation differs in that the benefits
customers seek are their product needs. Consider that a customer who purchases over-the-
counter cold relief medication may be interested in two benefits: stopping a runny nose and
relieving chest congestion. By determining desired benefits, marketers can divide people into
groups by the benefits they seek. The effectiveness of such segmentation depends on three
conditions: (1) the benefits sought must be identifiable, (2) using these benefits, marketers
must be able to divide people into recognizable segments, and (3) one or more of the resulting
segments must be accessible to the firm’s marketing efforts.
Marketers can segment consumer markets using many characteristics. They do not, how-
ever, use the same variables to segment business characteristics. We will learn about business
market segmentation in the next section.

Variables for Segmenting Business Markets
Like consumer markets, business markets are frequently segmented for marketing purposes.
Marketers segment business markets according to geographic location, type of organization,
customer size, and product use.

Geographic Location

Earlier we noted that the demand for consumer products can vary considerably among
geographic areas due to differences in climate, terrain, or regional customer preferences.
Demand for business products also varies according to geographic location. For instance,
producers of lumber may divide their markets geographically because customers’ needs vary benefit segmentation The
by region. Geographic segmentation may be especially appropriate for producers seeking division of a market according
to reach industries concentrated in certain locations, such as furniture and textile producers to benefits that consumers want
concentrated in the Southeast. from the product

Green Marketing

IKEA Adds to the Green Lifestyle

IKEA, the global retailer known for its stylish, affordable, generate clean energy. Instead of the wooden pallets
assemble-it-yourself furniture, has added interest in sus- traditionally used for shipping merchandise, IKEA now
tainability as a key element in its segmentation strategy. uses single-use pallets made from recyclable cardboard.
Spotlighting environmental efforts gives IKEA an edge The new pallets are more compact and much lighter
with the growing segment of eco-minded customers and than wooden pallets, which means less fuel is consumed
helps the company’s bottom line as well. “What is good when they’re transported—and IKEA pays less for
for our customers is also good for us in the long run,” transportation.
says CEO Mikael Ohlsson. IKEA recently began rating its products using an
Consumers who want to live a greener lifestyle 11 -point sustainability scorecard, tracking attributes such
appreciate the way IKEA puts its environmental values as the product’s percentage of recycled content and the
into practice, making its stores, its products, and even amount of clean energy used in production. Such detailed
its shipping materials more eco-friendly every year. information appeals to customers seeking a greener life-
More than three-quarters of IKEA’s U.S. stores and style, who are interested in each product’s environmental
b
distribution centers are equipped with solar panels to impact.

© iStockphoto.com/CRTd

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.