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Segmentation and Target Market

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Trader Joe’s is an organic grocery food store that is one of the best known organic food chains. By listening to the consumer and adjusting to the changing consumer market, Trader Joe’s had built a brand equity that is continuously growing. Trader Joe’s faces stiff competition from other large organic food chains therefore must stand out and adapt to the consumers’ needs. Marketing strategies are important to communicate to the consumer more effectively and help target the consumer to their product.

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Trader Joe’s segments its products by psychographic, behavioral and demographic characteristics and targets a variety of consumers. There is an increasing number of people changing their habits to include organic products which is why Trader Joe’s targets these areas. In the next few paragraphs we are going to discuss these areas along with how Trader Joe’s is segmented in the organic food store industry.


Trader Joe’s is a unique grocery store. It started as a convenience store in 1958 in California, but in 1967 it opened as a new concept in Pasadena, California.

Freed from the convenience store image, it now had a romantic travel and leisure image of the South Seas. The store was also a very strong food outlet, featuring specialty items such as real sourdough bread, whole coffee beans etc. It appealed to people at all income levels (Loeb, 2012). The privately held company’s sales last year were roughly $8 billion. Trader Joe’s has a deliberately scaled-down strategy. The company selects relatively small stores with a carefully curated selection of items. Its stores sell an estimated $1,750 in merchandise per square foot.

The company has no debt and funds all growth from its own coffers (Kowitt, 2010). The rise of Trader Joe’s reflects Americans’ changing attitudes about food. It sells billions of dollars in food and beverages that years ago would have been considered gourmet but are now mainstays of the U.S. diet, such as craft beers and white-cheese popcorn. The genius of Trader Joe’s is staying a step ahead of Americans’ increasingly adventurous palates with interesting new items that shoppers will collectively buy in big volumes (Kowitt, 2010). Joe Coulombe, now 80, opened the first Trader Joe’s 43 years ago in Pasadena to serve a sophisticated — but strapped – consumer (Kowit, 2010).


“Like all successful retail chains, Trader Joe’s has specific demographic criteria that have to be met to consider setting up shop in a particular location. Within a 15–minute driving radius of a potential site, there must be at least 36,000 people with four–year college degrees who have a median age of 44 and earn a combined household income of $64K a year” (Lebos, 2012). Trader Joe’s also takes into consideration the distribution process when determining where to open a new store. “In the past they have looked at who is subscribing to high-end food and cooking magazines as a way of divining where the epicures are” (Kowitt, 2010).


Companies use psychographics to identify the reasons why the consumer purchases their product. The data is used to define those consumers who want what you sell and then is used to get the consumers likes and dislikes. Companies also use this data to determine the locations of their new stores. Trader Joe’s has a unique atmosphere with employee’s boasting cheerful uniforms, handing out pastries to customers and having extensive knowledge of the products in the store. With a great return policy and upbeat atmosphere, Trader Joe’s great customer service keeps consumers coming back.

Trader Joe’s has also done a great job staying relevant by really understanding its customers. With the huge push in America to get off the obesity track, Trader Joe’s decided to fully commit to cutting out all added trans fats from their food products along with artificial colors, flavors, preservatives, and GMO ingredients. Trader Joe’s uses symbols on its packaging so the customers can easily see what products best fit into their diets. Also, while Trader Joe’s is not a health food chain, it still supplies a large amount of organic options in its stores which sells in the billions (Smyszkowski, 2012).


It is crucial for a business to know where their customers come from in order to select the best location for the store. Choosing the best geographic area can help in the success of the business or the failure of the business. This is why Trader Joe’s has particular criteria when choosing new store locations. Trader Joe’s is aware who their target consumer is and utilizes the data they receive to place their locations in the areas that will benefit in the growth of the organization.

Behavioral Characteristics

Trader Joe’s has great workforce management practices and its employees enjoy what they do. They have cheerful attitudes and are more than willing to assist customers with anything in the store. Trader Joe’s employees are engaged in conversation with the customers that shop in the store and make the customers aware of any new or exciting products from them to try. The positive behavior of these employees is due to the compensation and benefits each employee receives, which is far more competitive than other grocery food stores.

Trader Joe’s has also created an environment where employees feel valued and know their opinions matter to the growth of the organization. There is a significant amount invested in each employee which makes Trader Joe’s one of the go-to places to work. Trader Joe’s “prides itself on the opportunities it offers everyone, from young workers putting in just a few hours a month to help pay for college to store managers, has been cited as one of the best places to work by Fortune magazine (Lewis, 2005). The customer has an enjoyable experience when shopping at Trader Joe’s.  http://www.simplyhired.com/a/jobtrends/trend/q-trader+joe’s

Positioning Statement

Trader Joe’s is the optimum organic food store for the price conscious shopper. Our products are one of a kind and our customer service is not to be compared to any other in the industry.


Trader Joe’s has a mission to have the best food and best customer service for their consumer. With the many grocery choices under the Trader Joe’s label and the low prices offered to the consumer, there is no doubt Trader Joe’s is among one of the favorites in the organic food market. Trader Joe’s appeals to many different segments and is one of the fastest growing in its industry because consumers trust the brand. “Trader Joe’s has a medium to high market potential” which shows that Trader Joe’s appeals to many different segments, but its fastest growing segment is the Millennial group.

The Millennial segment is predicted to be a growing segment for Trader Joe’s because these students fit the “educated and price restricted” shopper (Smyszkowski, 2012). With Trader Joe’s having careful consideration of their demographics, target market, and focus on simplicity and fun, there is no doubt this company will continue to be a favorite among consumers.

Kowitt, B. (2010). Inside the secret world of Trader Joe’s. Retrieved from http://money.cnn.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/ Lebos, J. L. (2012). Say it ain’t so, Joe. Retrieved from

http://www.connectsavannah.com/savannah/say-it-aint-so-joe/Content?oid=2136303 Lewis, L. (2005). Fostering a Loyal Workforce at Trader Joe’s. Retrieved from
http://www.workforce.com/articles/fostering-a-loyal-workforce-at-trader-joe-s Loeb, W. (2012). Aldi’s Trader Joe’s is a Winner. Retrieved from
http://www.forbes.com/sites/walterloeb/2012/05/17/aldis-trader-joes-is-a-winner/ Smyszkowski, . (2012). Trader Joe’s. Retrieved from http://storify.com/smyszkowski/trader-joes

Cite this Segmentation and Target Market

Segmentation and Target Market. (2016, Jun 07). Retrieved from https://graduateway.com/segmentation-and-target-market/

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