Market Segmentation Criteria Essay

1356 words - 5 pages

Even McDonald's, which has one of the most recognizable brands in the fast food industry, cannot satisfy every customer's need related to food. However, the company has a strong customer base that consists of different types of consumers. Needs are different for each of these consumers and McDonald's certainly realizes it cannot meet the needs of these various groups by marketing to them in the same way.The U.S. Department of Agriculture (USDA) conducted a dietary survey in the United States in the late ninety's regarding the consumption of fast food. Based on the sample population, the results had shown two pieces of information important to McDonald's management. First, the percentage of people eating fast food increased from the early 1990's to when the survey was last conducted in the late 1990's, a trend that is most like to carry on. Secondly, the likelihood of eating fast food will actually decrease with age. Thus, younger adults, to whom we plan to market the McDonald's rewards card, are certainly a substantial consumer in the fast food industry. Other key findings from the USDA research study, were 26.5 percent of adults reported eating fast food, young adults ages 20 to 29 years were about 4 times more likely to eat fast food than adults 55 years of age and older. Fast food are consumed by both genders (30% males, 23.5% females), more African Americans (31%) than other race-ethnic groups reported eating fast food, and young adults living in the Midwest (29%) or in the South (29%) were more likely to be fast food eaters than individuals living in the Northeast (20%) or the West (22%) (Journal of the American College of Nutrition).With data in hand, McDonald's can begin to pursue the first of the three major steps in target marketing, which is market segmentation. This is the process of dividing a market into clearly defined groups of buyers with different needs: characteristics or behaviors that require a unique market mix (Kotler P. & Keller K., 2006 p. 263). There are four types of criteria that make for a good market segment these criteria are homogenous, heterogeneous, substantial, and operational.For purposes of marketing our rewards card, homogenous, substantial, and operational criteria will impact our target market selection. Our goal is market the rewards card to young adults. Our expectation is that this group of individuals will respond to our marketing mix in a similar fashion, thus meeting the homogeneous criteria. As for substantial criteria, which is to make certain that the market segment is significant enough to make a profit, survey results from the USDA research study has validated this, in our opinion. Finally, we have operational criteria, which is extremely important when segmenting a broad product-market. This pertains to factoring in demographic information such as income, gender, geographic location, and age. Once again, the data results from the USDA survey will prove invaluable for our operational...

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