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Market Segmentation at Target

Market segmentation is an important element of marketing. Consumers don’t all have the same needs, desires or purchasing habits. Through segmentation, organizations break their consumer base into smaller groups and develop marketing for each of them. One company I recently shopped at is Target. I often go to Target because it stocks so many products: groceries, clothing, electronics, home goods and other everyday items.

Target’s Market Segments and Segmentation Strategies

Target speaks to a range of market segments. Probably the most obvious is demographic. Consumers of different ages, income levels and life stages will all find different things at Target. A university student, for example, might be more interested in clothes, electronics and dorm essentials. A parent might be more drawn to home goods, toys, clothing for their child and groceries. Depending on which group it is trying to reach, Target could promote different products and deals.

In addition, Target uses behavioral segmentation. It considers how its customers like to shop. Some will want to shop in the store; others will use its website or app. Features such as Drive Up, Order Pickup and in-store pickup appeal to customers who don’t want to spend much time shopping in the store. Through Target Circle, customers receive special offers and incentives from Target. This could build up their loyalty to the brand and encourage them to return.

Another segmentation tool used by Target is geography. Often, depending on where someone lives, what time of year it is and what kind of neighborhood their store is in, their needs will change. What might be a key product at one of its stores in one area may be of less interest to customers in another. By tailoring products and deals to what’s available locally, Target could better meet its customers in different parts of the country.

Key Points for Implementing Segmentation Strategies

Firms considering a segmentation strategy should keep the following points in mind.

First, they need to think about their customer base. Not everyone will have the same needs. Through market research, purchasing behavior and customer data, they may well find important differences between groups of people.

Second, a segment needs to be large or important enough to warrant investment by the firm. A marketing campaign for a small group of people may well not be value for money for the firm.

Third, they need to consider what distinguishes one segment from another. It is often not enough, for example, to think of someone’s income or age in order to understand why they might buy a product. Shopping patterns, values, convenience, interests and psychology will all play a role.

Fourth, their marketing message needs to resonate with each segment. A campaign for parents, for example, might focus on convenience and value; one for university students might be more concerned with trendiness and price.

And finally, they should regularly review their segmentation. Over time, people’s purchasing habits and preferences will change. A segment that worked well years ago may well need a different approach now.

A New Market Segment for Target

I think there’s potential for Target to serve a market of consumers interested in convenient, healthful, high-protein meals. Increasingly, consumers are looking at products that might help them add more protein to their diet, keep track of calories or that could be used to put a meal together with minimal effort. Such consumers might be fitness enthusiasts, college students, busy professionals and people who do meal prep on a weekly basis.

Rather than segmenting by age, I think Target could segment this group by behavior and psychology. For example, it might look at customers who tend to buy high-protein snacks, Greek yogurt, frozen meals, meal-prep containers and lean proteins. And through its app and Target Circle, it could send them promotions for, say, multiple meal-prep products in one purchase.

In its app or on its website, Target could label product categories as “High-Protein Meals,” “Healthy Meals on a Budget” or “Quick Meal Prep.” In social media ads, Target could show meals it has in stock, using its products, along with the calorie count, protein content and cost of each meal. In this way, it could promote specific products, but also show customers how they might fit into their lives.

A key to effective market segmentation is that different groups of consumers will buy things for different reasons. Through demographic, geographic and behavioral segmentation, Target already touches many different kinds of customers. By continuing to identify emerging groups, such as consumers interested in convenient and high-protein foods, Target could create more personalized marketing strategies and potentially develop stronger relationships with those customers.