Page 236 - Marketing Management

Identifying Market

Segments and Targets

Companies cannot connect with all customers in large, broad, or diverse
markets. But they can divide such markets into groups of consumers or segments with distinct
needs and wants. A company then needs to identify which market segments it can serve effec-
tively. This decision requires a keen understanding of consumer behavior and careful strategic
thinking. To develop the best marketing plans, managers need to understand what makes each
segment unique and different. Identifying and satisfying the right market segments is often the
key to marketing success.

One of the most famous leisure travel brands in the world, France’s Club
Méditerranée, better known as Club Med, has targeted several different customer
groups through the years. Started in 1950 and long a pioneer in the concept of the
all-inclusive resort, Club Med originally used exotic locations, bare-bones accom-
modations, and the advertising theme “The antidote to civilization” to target singles,
young couples, and others seeking sea, sand, and a good time. Rooms did not have phones, TVs,
fans, or locks on the doors. To transcend its hedonistic image and broaden its clientele, Club Med
decided to add family-friendly resort locations and services in the 1970s. Depending on location,
the resorts, known as villages, offer a wide range of activities, from flying-trapeze clinics to body
building to snow skiing. Club Med staff are called “GOs,” or Gentil
Organisateurs (“gracious/nice organizers”); clients are called To compete more effectively, many companies are now
“GMs,” or Gentils Membres (“gracious/nice guests/members”). An embracing target marketing. Instead of scattering their marketing
informal atmosphere has GOs and GMs dining, drinking, dancing, efforts, they’re focusing on those consumers they have the
and playing together. greatest chance of satisfying.
An attempt to move outside the leisure-travel business to become Effective target marketing requires that marketers:
a broader services company proved ill-fated; a series of urban 1. Identify and profile distinct groups of buyers who differ in
bar/restaurants flopped. Combined with a post-9/11 economic re- their needs and wants (market segmentation).
cession and increased competition, the failure left Club Med reeling 2. Select one or more market segments to enter (market
in 2001–2002. Under the new leadership of Henri Giscard d’Estaing targeting).
(son of the former president of France), the company invested hun- 3. For each target segment, establish and communicate the
dreds of millions of dollars to move upscale and attract wealthier distinctive benefit(s) of the company’s market offering
customers by crafting a more sophisticated image. For the firm’s (market positioning).
60th anniversary in 2010, advertising proclaimed that Club Med was This chapter will focus on the first two steps. After reviewing
“Where Happiness Means the World,” which was backed by an some important branding concepts in Chapter 9, Chapter 10
extensive online marketing effort. 1 discusses the third step, market positioning.

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