NO! I would not like fries with that!

Charmaine Calleja- 211807066

Gone are the days of customers being satisfied with a vanilla one-size fits all approach to service, products and marketing.  Through globalisation and digital transformation, customers have greater access to alternatives, which means that for organisations, survival is dependent on understanding and satisfying customer’s needs better than their competitors.

In today’s world, where ‘big data’ is at everyone and organisation’s fingertips, customers expect personalised conversations based on their unique needs.

Segmentation holds the key to an organisation’s understanding of the market they are in.  The key segmentation areas are:

  1. Demographic – age, family, sex, religion, race, marital status, income, education, social class and occupation
  2. Geographic – region, population, climate
  3. Psychological – Lifestyle, personality, interests
  4. Behavioural – benefits sought, usage rates, user status, brand loyalty, readiness to buy, occasions.

Once a market’s segments are identified, organisations decide on the strategy to apply and segments to target.

Many organisations select a Depth Strategy.  This involves the selection of one specific segment to focus their attention on.  Some examples of this are:


Fernwood identified an opportunity to target the specific health and fitness needs of women and created a chain of gyms for women only.




financial review.jpg


It is clear through their title alone, that the Financial Review is focused on one segment of readers.  This paper targets those in the financial sector who are highly educated and high income earners.  In addition to targeted stories and articles, the advertisements within the paper are generally for high end products such as luxury cars and expensive watches.




Some organisations employ a tailored strategy, customising products and/or services to suit multiple segments.   The four major Australian Banks apply this strategy.  The banks typically segment by demographics such as income levels and age as well as life stage and usage behaviour.  ANZ offers 4 different categories of credit cards:

  • Low interest rate cards
  • Low fee cards
  • Reward cards
  • Frequent Flyer cards

Within each of the 4 categories, there are a number of sub-categories to further address lower levels of segmentation.  For example, within the Rewards card category, there is a Classic Rewards, Platinum Rewards and Black Rewards cards.  Each level of sub-category segmentation allows different credit limits and access to different levels of privileges depending on the customer’s level of income and overall credit rating.

It is rare that an organisation can rely on mass marketing to succeed.  However, 10 or 15 years ago, an organisation like Australia Post had no need to develop segmentation and targeted marketing.  They were firmly positioned as the nation’s provider of postal services.   Over recent years, Australia post has lost significant relevance in the modern world which has left them scrambling to re-position the organisation, through the use of marketing slogans like “Australia Post, powering online purchasing”

australia post.jpg

Not just any segment will do!

Once the market segments are identified, choosing the one(s) to focus on requires the organisation closely consider its strategic fit and profitability.

Strategic fit – The marketing segment must align and support the overall company strategy.  If a SWOT analysis can provide insight into an organisation’s strengths and weaknesses as well as the external opportunities and threats that exist in association with the segments being considered.

Profitability – Investigation in to the anticipated level of competition, growth, segment size, customer behaviour and expectations are required to understand if the segment is worth pursuing.  This information can be found through customer surveys representing attitudes, preferences and behaviours as well as industry data available.

Positioning for success!

It can be said that the single most important aspect of marketing is positioning.  Regardless of the amount of time and money an organisation invests in segmentation and targeting, if the customer/market’s perception of the product/organisation is not aligned to the marketing goal success will be limited.

McDonalds are one of the only major fast food retails to invest heavily on ensuring they are no longer considered the generic fast food chain serving all customers with pre-cooked generic food.  McDonalds started to introduce healthy options within their menus for both adults and children.  They also moved away from pre-cooked ‘fast food’ to a fresh cooked to order model.  Most recently the gourmet ‘Create your taste’ menu was introduced allowing customers to create unique burgers to suit their personal desires.


In conclusion, a good positioning statement should include an indication of the target segment, a competitive frame of reference and a competitive advantage or unique selling proposition.  This can help guide an organisations marketing strategies and actions to achieve full success.



ANZ. 2016. Compare credit cards. [ONLINE] Available at: [Accessed 7 August 2016].

Australian Financial Review. 2016. AFR about us. [ONLINE] Available at: [Accessed 7 August 2016].

Australia Post. 2016. Sending in Australia. [ONLINE] Available at: [Accessed 7 August 2016].

Iacobucci, D., 2014, Marketing Management (MM4): Student Edition, South-Western: Cengage Learning, Mason.

Fernwood. 2016. Training at Fernwood. [ONLINE] Available at: [Accessed 7 August 2016].

Internet Centre for Management and Business Administration, Inc. 2010. Market Segmentation. [ONLINE] Available at: [Accessed 7 August 2016].

McDonalds. 2016. Create your taste. [ONLINE] Available at: [Accessed 7 August 2016].







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