Ch. 8 - Segmenting and Targeting Markets

A market segment is a subgroup of people or organization sharing one or more characteristics that cause them to purchase similar products. Market segmentation is a process of dividing a market into similar groups or segments. In the world we live in, everyone has different needs. Most of the companies do their best to meet needs of one or more specific segments. In 1909, Chanel was targeted towards a woman who wanted be classy and fabulous. It started with little black dress and characteristic Chanel suits. 

Chanel’s products are targeted to different markets because of the diversity of their products. There is something available for everyone Chanel offers different product lines which are the target to different markets: Haute Couture Line, Resort line, Ready to wear line, Children’s and men’s collection. Skin care, make-up, Accessories, Jewellery, Footwear, and Fragrances. There are three important reasons why marketers segment markets. First is to identify those groups, analyse them and their buying behaviors. Second, segmentation provides them with information to help them design products specifically matched with their desires. Third, segmentation is consistent with marketing concept of satisfying customers while meeting organizations objectives.

 The article for From the CNN Wire Staff on November 8, 2012, states:

“Chanel has opened just three boutiques in Shanghai -- one of the world's most populous cities. Pavlovsky told CNN: ‘We try to get the best three boutiques in Shanghai instead of having 10 boutiques.’

That, he said, is the "number one" priority. ‘We try to bring through the boutiques the best value of the brand... our idea is not to open lots of boutiques but be able to give, through the existing one, the best value and the best service to our customers.’

China -- with a population of approximately 1.3 billion people -- is a focus for luxury brands due to its expanding middle classes. Its growth comes as consumer spending in Europe and the U.S. dwindles.

Pavlovsky said customers in China are ‘experts of the fashion world, they know everything, every detail and at the end of the day what they want is the same product that we are selling here in Paris or London.’”

Geographic segmentation: Chanel has over 200 stores around the world. In those stores, you will be able to find different products, specifically in different countries. People in Russia like a lot of crystals, and shiny products, while people in Asia keep simpler and prefer black or nothing abstract.

Demographic Segmentation- Chanel targets both genders in age between 20 and 80 years of age, who are wealthy and are able to afford their products. However, there are more products targeting women.

Psychographic Segmentation- Chanel identifies its target market by target’s lifestyle and motives. Most of Chanel’s customers purchase its products because they are symbols of luxury, elegance, and class. Chanel uses a lot of famous models to appeals to their customers with image relatives motives. In countries like Russia or China wearing Chanel is important for people to show their social status.