To obtain success, and then retain success, organizations need to determine which market segments to focus (Kotler & Keller, 2012).
Additional consideration is necessary to ensure that the organization can effectively serve this market segment. According to Kotler and Keller (2012), the finest marketing plans identify and embrace segment differentiation by determining the demographic, psychographic, geographic, and behavioral characteristics. For example purposes, this white paper discusses segmentation and target market for “Your Organization”. Consumer Segmentation
Organizations will not benefit from mass marketing, however will gain success through the insight of consumer segmentation. As mentioned above, the four primary segmentation variables are demographic, psychographic, geographic, and behavioral characteristics. For clarification purposes, a brief description of each is shown. Demographic segmentation separates consumers by “variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class” (Kotler & Keller, 2012, p. 216).
psychographic segmentation takes into consideration the consumer values, attitudes, and lifestyles. Geographic segmentation addresses the variables of region, climate, population growth rates and density. Lastly, behavioral segmentation considers price sensitivity, usage, brand loyalty, and attitudes. Examples of “Your Organization”’s segmentations is below, using data provided by the organization’s core operating system “Your Organization Server” (2014), effective for June 1, 2014. Demographic Segmentation
The Term Paper on Segmentation and Target Market 2
The three major players in the soft drink market are PepsiCo, Inc., the Coca-Cola Company, and the Dr. Pepper Snapple Group (Change Lab Solutions, n.d.). All of them use effective market segmentation to target specific markets. Effective target marketing requires that marketers, segment the market, by identifying and profiling to find a distinct group of buyers who differ in their wants and needs ...
“Your Organization” is a community chartered credit union in Richmond, Virginia. The demographic information includes age, income, and gender. When accessing the age brackets for members age 12 or older, management found the primary age bracket of 47 – 65 years old at 41.8%. The chart below provides details on each age bracket. Based on this information, the credit union needs to determine how to shift the average age of our membership to 33 – 46 years of age to firmly establish a strong future membership base.
Gender is the final demographic item the credit union reviews. Each gender is broken down within the age brackets. The credit union was originally formed to serve the Richmond employees of DuPont, leading management to the assumption of a significantly larger male percentage of members. As shown below this assumption was incorrect; thus, additional marketing focus to the female segment is ideal. Currently, the credit union focuses on large truck, motorcycle, and SUV loan target mailings, leaving the mid-size and minivan opportunities unaddressed.
Information was available regarding the occupations of the membership; however, the disorganization of the data lead to inconclusive results. Consequently, the senior management made the decision to disregard the results from this demographic group. Geographic Segmentation
“Your Organization”, as a community charter credit union, faces the challenge of a small geographic area in which to serve consumers. Potential membership must live, work, worship, volunteer, or attend school in the counties of Chesterfield, Hanover, Henrico, and the city of Richmond. In order for management to gain insight into the location of members’ households, the credit union segments the membership by city or county. The geographic information is as follows: City of County
The Essay on Credit Union Unions Income Banks
There are many distinguishing differences among credit unions and banks. The most controversial and prominent is the differences in taxation of the two institutions. While banks are required to pay all taxes of any corporation, credit unions are except from having to pay federal and state income taxes. Most banks and associations that govern them are pushing for the federal government to require ...
Percentage of Membership
Chesterfield
43.21%
Hanover
14.38%
Henrico
10.63%
City of Richmond
28.97%
Undetermined
2.8%
Behavioral Segmentation
“Your Organization” reviews the following behavioral groups, credit driven, fee driven, upscale, middle market, middle income depositor, and low income depositor. These groups are then cross compared with age and income brackets. The chart below provides a visual on “Your Organization”’s percentages, along with credit union national averages (Open Solutions Inc., 2011).
Age & Income
18 – 34
35 – 44
45 – 54
55-64
65+
$125,000+
Credit Driven
10%
10%
Upscale
6%, 9%
$50,000 – $125,000
Middle Market
26%, 24%
Middle Income Depositor
17%, 17%
Less than $50,000
Fee Driven
19%, 18%
Low Income Depositor
22%, 22%
“Your Organization” Credit Union National Averages
Based this information the credit union should focus on further targeting the upscale segment and relying less on the fee driven. As regulations continue to change, fee income will potentially decrease. Psychographic Segmentation
In regard to the psychographic segmentation, “Your Organization” has relied on member loyalty throughout the years. However, as economic turbulence continues to impact the organization, per the Vice-President of Marketing (2014), the credit union is seeking to further exploration into psychographic segmentation. According to Kotler & Keller (2012), Strategic Business Insight’s (SBI) VALS framework signifies the values and lifestyles of classified Unites States adults using questionnaires to identify the consumer’s motivation and resources. Information from SBI states that with the ongoing evolution of the financial industry, “consumers are becoming increasing multidimensional” (SBI, 2004).
The VALS assessment takes into consideration for channel or interface preferences, trust in institutions, control within the household, and much more to determine financial patterns. The credit union would benefit from conducting research on the psychographic segmentation of the membership, as no longer demographic and behavioral segmentation is enough. Positioning Statement
The Business plan on Bankruptcy Among Young People Because of Credit Card
Consumer credit can be defined as a debt that someone incurs for the purpose of purchasing a good or service. Common forms of consumer credit include credit cards, store cards, motor (auto) finance, personal loans (installment loans), consumer lines of credit, retail loans (retail installment loans) and mortgages. The spread of credit card ownership and usage across developing Asia Pacific ...
A positioning statement for “Your Organization” which supports the current brand and strategies is as follows. “Your Organization” will assist our community members in reaching their financial goals. We are committed to supporting and serving fellow community members through financial needs, charity events, and volunteering. Our credit union promises to serve our members through each stage of life. This supports the current psychographic segmentation of brand loyalty, and a willingness to support the membership financially through each stage of life. Conclusion
Regardless of the organization, the ability to obtain success, and then retain it is due in part to ability to focus on the correct market segments. However, the organization must ensure that it possesses the resources to this market segment. “Your Organization” is working to create the highest level of marketing plans by identifying and embracing segment differentiation through demographic, psychographic, geographic, and behavioral characteristics. However, further improvements are necessary to achieve the ultimate tier of success.
References
“Your Organization Server”. (2014).
Segmentation data. Retrieved from “Your Organization” on June 1, 2014. Kotler, P., & Keller, K. L. (2012).
Marketing management (14th ed.).
Upper Saddle River, NJ: Pearson Prentice Hall. Open Solutions Incorporated. (2011).
Overview analysis. Retrieved from “Your Organization” corporate library on June 1, 2014. Strategic Business Insights. (2004, June).
Segmentation in the twenty-first century: Financial behavior of the VALS segments. Retrieved from http://www.strategicbusinessinsights.com/cfd/MRsummaries/MR.VI-09.shtml.
