“Market Segmentation divides the mass market into subsets of consumers who share common needs, characteristics, or behaviors, and then targets one or more of those segments with a distinct marketing mix” (Kardes. 2014). Market segmentation is beneficial for businesses and marketers alike because it allows them to focus on the customers needs and wants within a division of their products. Segmentation strategies allow businesses to position advertisements more efficiently by reaching specific target markets for specific products or services. With advertisements tailored to a market segment and not mass-marketed to the public companies can increase profits and the overall brand awareness of the business (Kardes, 2014).
Under Armour’s primary market as a company was the men’s athletic wear market for a long time. Under Armour was a brand built on a tough-guy football image and men were the target market (Darden, 2016). However, the company wanted to expand their business and shift their focus on a new market, women. The female market segment was Under Armour’s new target market, and they had to implement new segmentation strategies in order to successfully capture the attention of women.
Under Armour created the campaign “I Will What I Want” to celebrate women “who had the physical and mental strength to tune out the external pressures and turn inward and chart their own course” (Darden, 2016). Under Armour used unorthodox athletes to reach a broader audience encompassing all women, not just athletes. The company partnered with famous ballerina Misty Copeland, and supermodel Gisselle Bundchen, in hopes of building brand equity and brand awareness (Darden, 2016). The “I Will What I Want” campaign grew women’s apparel to 30% of sales, making Under Armour more competitive than Lululemon and Nike (Darden, 2016).
When implementing segmentation strategies it is important to first determine the primary market segment. It is important to understand who the consumer is in order tailor marketing efforts to them specifically. Creating a market segment around the majority fallacy, large average segments, instead of smaller, less typical segments will ensure the market is substantial enough to be successful and sustainable (Kardes, 2014). Once the market segment has been determined shifting the focus to the bases of segmentation will be the next step in better understanding the consumer. Researching the demographic, geographic, psychographic, and behavioral attributes of the target market will demonstrate the interests, wants, and needs of this particular segment allowing you to tailor your advertisements to the findings gathered. The next tip is to look at the positioning of the product. Positioning is the process of communicating with the target market through the use of marketing mix variables to help consumers differentiate a product from others and perceive how that satisfies their needs (Kardes, 2014). Overall, the segmentation strategies must align with brand of the company and the wants and needs of the consumer.
Identifying a market segment is how a business determines where to expand its products and services. If there is a need in the market, and the market segment matches the companies products then the expansion is a smart investment for the company to make. Take the HGTV hit show Fixer Upper, starring Chip and Joanna Gaines, who renovate dilapidated houses for families into Farmhouse dream homes in the Waco Texas area. Her designs and décor have created farmhouse envy around the United States, but for residents outside of Texas weren’t able to purchase her designs until now. Chip and Joanna Gaines just announced they will be bringing a new collection of their décor, Hearth & Home, to Target the beginning of November (Halkias, 2017).
The exclusive partnership with Target was formed because a market segment was identified and a need was determined. The market segment is middle-class families nationwide who want to furnish and design their homes with farmhouse inspiration but don’t want to break the bank while doing so. Now, Fixer Upper fans can grab her collection at an affordable price at their local Target. The segmentation strategy is to utilize their current fan base and followers of Fixer Upper to create a word-of-mouth advertisement of the new collection and expand their audience nation-wide. Partnering with Target will give them a great platform to expand their designs and reach families throughout the United States which will grow their brand and business drastically. The brand will launch more than 300 items with an average price under $30 which matches the demographics of Target’s customers (Halkias, 2017).
Darden Business Publishing. (2016, July 27). Under Armour’s Willful Digital Moves. University of Virginia. Retrieved by https://cb.hbsp.harvard.edu/cbmp/content/69558907
Halkias, Maria. (2017, September 14). HGTV’s ‘Fixer Upper’ couple Chip and Joanna Gaines have a deal with Target. Retrieved by https://www.dallasnews.com/business/retail/2017/09/13/chip-joanna-gaines-deal-target
Kardes, Frank. (2014, January). Consumer Behavior. South-Western College Pub. 2nd Edition.
Ashley Dembosz - Marketing 