Target marketing and segmentation: valid and useful tools for marketing

Dennis J. Cahill North Union Associates, Inc., Cleveland, Ohio, USA

Discusses Wright’s recent attack on targeting and segmentation theory. Proposes that, although Wright has some valid criticisms about specific applications of the concepts, targeting and segmentation are acceptable and defensible marketing strategies if properly designed. Gives some indications of possible methods for segmenting that may meet Wright’s criticisms.

Recently, Malcom Wright presented a daunting challenge to the marketing discipline[1] – to justify the ongoing use of segmentation and target marketing. Although his article was written in response to what he characterized as a “startling” argument by Mitchell that zodiac signs be used for segmentation[2], he used the occasion to attack the concepts of segmentation and targeting per se. Although Mitchell’s example of zodiacal segmentation was perhaps light-hearted, his argument is not. Mitchell posits, as do most marketing academics and practitioners, that the firm will be better off – in terms of greater unit sales at (possibly) higher prices and/or lower cost of sales – by emphasizing our approach to certain groups of people and deemphasizing our approach to others.

Wright’s argument
In essence, Wright totally denies the validity of segmentation and targeting on two grounds. The first ground is that, for segmentation to have validity, the segments are associated with a stable set of preferences. The second ground is that, even if segmentation works, we need to prove that targeting these segments provides a superior return to the firm than does shotgun marketing. He holds[1] that neither ground has been proven, either by Mitchell or by marketers in general. But is he correct?

Target marketing defined and explained
Not all customers are alike. As unprofound