About Market Segmentation Analysis

Table of Content

Introduction: Market segmentation is a marketing concept that enables companies to divide the entire market into smaller segments. This allows them to develop strategies to attract their target customers, who have diverse needs and wants. By customizing their products or services for specific customer groups, companies can effectively cater to their customers’ preferences.

In order to meet the distinct needs and expectations of various market segments, it is crucial for every company to create a customized marketing mix. This entails adopting one of four market segmentation strategies: behavioral, demographic, psychographic, or geographical. Subsequently, the company selects its target market which comprises individuals who share common needs that the company aims to satisfy.

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When developing a marketing plan, it is important to identify the target market and choose a targeting strategy. There are four categories of targeting strategies: undifferentiated marketing, differentiated marketing, concentrated marketing, and micromarketing. These strategies assist in deciding whether to focus on a broad or narrow audience. The last step involves determining the brand’s value proposition through positioning strategies.

In this section, we will discuss the five value propositions: offering more benefits for a higher price, providing more benefits for the same price, delivering more benefits for a lower price, ensuring same benefits for a lower price, and offering fewer benefits for a lower price. We will examine how companies implement these strategies in real markets. To illustrate market segmentation through behavioral segmentation, we have chosen TGI Fridays as a case study. Behavioral segmentation involves classifying customers into groups based on their product usage or response. We will provide an in-depth explanation of how TGI Fridays utilizes behavioral segmentation.

Behavioral segmentations can be categorized into occasions, benefits, and user status. TGI Fridays caters to customers in both regular and special occasions. Regular occasions are served on a daily basis as mentioned in the company’s tagline “In Here It’s Always Friday.” While special occasions refer to events like birthday parties that TGI Fridays arranges for their special patrons. They celebrate and entertain customers who opt to celebrate at TGI Fridays.

TGI Fridays is well-known for its dedication to satisfying customers, providing top-notch cuisine, excellent service, and convenient options. The restaurant has earned a strong reputation for its delicious menu offerings, including fresh appetizers, juicy burgers, and irresistible desserts. Additionally, TGI Fridays is committed to delivering exceptional customer service and upholding the same high standards as other leading companies in the food and beverage industry.

TGI Fridays is a popular eatery in the Western cuisine category, providing a cozy environment for patrons to unwind with their loved ones and savor their dining experience.

TGI Fridays is known worldwide as a leading restaurant. Similar to other establishments, its main goal is to retain its loyal customers and attract new ones.

Demographic Segmentation is a popular strategy for segmenting the market by categorizing it into different segments based on variables like age, income, and family life cycle. This segmentation is highly preferred as customer preferences and needs are closely linked to factors such as income and age.

Companies like TGI Fridays cater to a diverse audience, including individuals aged 12-19, 20-34, and 35-49. While these age groups have distinct culinary preferences influenced by their cultures, there is a growing interest in Western cuisine among them. Hence, they are considered part of the target demographic for establishments such as TGI Fridays that specialize in Western food.

The income range is an important factor in demographic segmentation, in addition to age. Upon further examination of TGI Fridays’ customers, it is clear that the majority have an income of over RM 6000 per month.

From the given information, it can be deduced that TGI Fridays targets customers with a higher income level. Moreover, they also take into account the family life cycle as another aspect of demographic segmentation. Their main focus is on attracting married couples, families with children, and couples seeking a tranquil dining experience following a hectic day at work.

Psychographic segmentation involves classifying a market segment based on people’s lifestyle, social standing, and temperament.

Psychographic segmentation is a form of consumer segmentation that considers the psychological factors impacting consumer purchasing behavior. It acknowledges that each person has unique eating habits influenced by their lifestyle, with preferences for Chinese, Indian, or Western food varying among customers. TGI Fridays specifically caters to those who favor Western cuisine as it aligns with their specialty. Furthermore, customer segmentation also takes into account social class, which is determined by buying power.

Various factors, such as customers’ background, income, and spending habits, affect their purchasing power. TGI Fridays specifically focuses on individuals belonging to the middle and upper-class groups who possess the financial means to dine at a high-end restaurant.

Geographic segmentation categorizes customers based on their geographical location, including world region or country, city or metro size, and density. It is crucial for companies to segment by geography as customers’ purchasing behavior can be affected by their residential or workplace location.

Therefore, TGI Fridays tailors its products, advertising, promotion, and sales strategies to meet the demands of different geographical variables. The restaurant chain primarily expands its branches in North America, Western Europe, the Middle East, and Asia as these regions have a higher percentage of high-income individuals. This indicates that TGI Fridays has successfully targeted specific world regions and countries. Additionally, another aspect of geographic segmentation involves density; TGI Fridays places more emphasis on urban areas as they attract customers with higher purchasing power compared to other locations.

After completing the market segmentation process, companies proceed to the next step called target marketing. Target marketing simplifies and reduces costs for promoting, pricing, and distributing a company’s products. Market targeting can be carried out at different levels: undifferentiated, differentiated, concentrated, and micromarketing.

Based on TGI Fridays’ target market, it can be concluded that they adopt undifferentiated marketing.

TGI Fridays restaurant has overcome obstacles in the food and beverage industry and attained prosperity. Their aim is to establish five additional establishments in a span of three years, necessitating a significant investment of 10 million dollars. By targeting individuals aged 22-55 from the middle and upper-middle-class demographic, TGI Fridays positions themselves as purveyors of top-notch cuisine at elevated prices, catering exclusively to those capable of affording their offerings. To further bolster their influence, TGI Fridays implements a business strategy involving dedicating 3% of their earnings towards advertising and promotion.

Increasing market awareness and expanding operations are key objectives for the company. It aims to provide top-notch food and services while focusing on differentiation and positioning in its marketing strategies. Differentiation involves having unique qualities that set the business apart from others.

In order for your product to outshine others in the market, it must possess distinctiveness. Positioning refers to strategically placing something at the opportune time and location. Within the food and beverage industry, TGI Fridays presents their products at a premium cost; however, they deliver customers with exceptionally superior cuisine typical of esteemed restaurants. As a result, TGI Fridays gains advantages by offering upscale products or services and imposing higher prices to compensate for their elevated expenditures.

THE RITZ-CARLTON Market Segmentation

Behavioral Segmentation

This text explains how customers in the hotel and tourism industries, like Ritz-Carlton Hotel, are segmented based on their behavior. The segmentation is divided into categories such as occasions, benefits, and loyalty. The first category, occasion, focuses on how customers respond to, use, or know a product.

The Ritz-Carlton Hotel is well-known for its attractive packages, especially during public holidays, which allow customers to enjoy their stay with loved ones. Moreover, many hotels and tourism industries prioritize offering personalized benefits that are customized to customer preferences. However, the Ritz-Carlton Hotel sets itself apart by providing unique advantages that make it more appealing to potential customers. Ultimately, building loyalty is essential for business growth and can be achieved through two approaches.

In business, there are two main objectives: acquiring new customers and retaining existing ones. Typically, when a company’s customer base grows rapidly, its clientele tends to become more loyal. Ritz-Carlton Hotel is widely known for delivering outstanding service and excelling in customer retention.

Demographic Segmentation: Demographic segmentation refers to dividing the market based on characteristics like age, income, and family life cycle. This segmentation method is highly popular due to its significant impact on customer needs.

Ritz-Carlton Hotel has a specific target audience in mind, primarily customers between the ages of 30-55 years old. This demographic is chosen due to their stable employment and financial capabilities to afford a luxurious experience at a 5-star hotel. Income level also plays a crucial role in their segmentation strategy, with the majority of their customer base consisting of individuals with a monthly income exceeding RM 10,000.

The Ritz-Carlton Hotel aims to cater to wealthy customers by providing outstanding services. They employ demographic segmentation, specifically targeting the family life cycle. Their focus is on married couples, families with children, and newlywed couples seeking a luxurious honeymoon experience. The hotel offers top-notch rooms and quality service to fulfill their indulgent desires.

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About Market Segmentation Analysis. (2016, Sep 09). Retrieved from


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