Segmentation and Target Market Paper

Segmentation and Target Market
Institution
Date
Introduction
Costco Wholesale Corporation is an enterprise that operates a global chain of warehouses that sell quality merchandises branded with latest trends at a substantial lower price. The Company is among the largest retailers in the global sector with annual revenue of approximately USD 64.4 billion dollars. The company segments its warehouses to help small and medium sized businesses by reducing the costs of purchases. The business venture is accredited in dealing with the top quality brands both nationally and regionally with prices considered manageable to its customers. Costco has achieved this status as a leading enterprise because of the great customer service, employee values.
When such an entity divides an entire market into diverse customer groups, it segments the market. These are done in an attempt to target marketing with the view of deciding which potential customer segments the company intends to reach. The process is believed to come before targeting, and thus it helps entities be more particular about whom they do product marketing to. The two features are equally imperative in ensuring and securing the success of a venture. The success of a company will only depend upon its understanding of the varied needs of customers and the diverse approaches to meeting those needs.
In their attempt to beat their competitors in the job market, the company has designed structures that are geared towards finding particular potential customers that are a match to their business through a process of marketing and segmentation. Imperatively, different customers have different choices, tastes, and needs. Some of these customers pay handily for the products of their choices while others bargain to get such products. When a company ventures into meeting the needs of these customers, it would be difficult targeting both of these segments with a product. It is in this accord that this company is obliged to do a marketing segmentation and targeting to identify and target certain demographic groups.
Following this, a company should realize that customer demographics includes certain aspects such as gender, income, age, geographical area and at times even the ethnic groups. Amongst these demographics, one may be appealed to purchase a company’s products and services while other segments may be likely suitable for competitive products. Hypothetically, a company called Paradise is known for its sales of household appliances. After an assessment, it is discovered that most of their customers are women of a particular age set. At this point, it is imperative that the company directs its focus and targets these customers in their marketing efforts.
Segmentation and Target Market for Costco Corporation
Today, marketers have come to the realization that the target audiences of particular products are not all similar, in that they differ in demographics, needs, attitudes, locations and some social affiliations. Segmentation and targeting therefore delivers products and services to the target audiences needs and wants (Jacobson, 2014). It is for this reason that necessary approaches are established to meet the needs and values of a particular segment of customers. In order for companies to thrive in the market and promote their products, brands or services appropriately, a proper understanding of these is paramount.
Costco Corporation company’s Co-Founder and Director Jim Sinegal in a statement alludes to the fact that they are in a position to offer substantially lower prices and better values on products. This according to him can be achieved by doing away with nearly all the embellishments and costs in this industry. He states that the company runs an extremely low overhead, geared towards enabling their clients get value at a convenient price. It is important to ascertain that segmentation, targeting, and position consists of three processes (Jacobson, 2014).Before carrying out this approach, the company has an opportunity to first determine the kind of clients that exist, and then select those who are regular. Finally the company is put to task in implementing the segmentation process by availing the products and services for that particular segment.
As said, "You can’t be all things to all people, "so it is in segmentation and targeting. Jacobson (2014) states that those businesses that specialize in meeting the market needs of a particular group of customers over another tend to be more profitable, and hold first moving goods and services. Costco cooperation in line with this intends to meet the demands of the majority since their products are affordable and available to its segmented customers. The company has a chain of warehouses designed to help small and medium sized businesses in purchasing products at a reduced price. This section of customers forms a threshold of the company thus becoming the central focus through a process of segmentation.
According to Schmidt & Hollensen, there are three approaches to marketing. The undifferentiated strategy entails a process where consumers are treated in the same manner with companies. The author states that this approach may function well when the nature of the product on sale is standard. In the concentrated strategy, an enterprise chooses to focus on a particular segment that exists and leaves the other parts for its competitors (Schmidt, & Hollensen, 2010). The other approach is the differentiated strategy in which a company targets many market segments with offers that are purposely designed for each segment.
Demographic Segmentation
This strategy tends to divide customers into segments based on particular demographic values such as age, family size, gender, family life cycle, occupation, education, income, religion, generation, race, nationality, and social class (Schmidt, & Hollensen, 2010).This strategy is main...