Ch. 8 - Segmenting and Targeting Markets

Market segmentation is very important since it enables businesses to segment their target market into meaningful groups with similar wants and needs, allowing them to produce products and services that will satisfy the groups targeted. Like many other businesses Netflix uses segmentation and targets different groups of customers. In order to do so, its segmentation must have some criteria such as substantiality, that is, be large enough to keep the business going; identifiability and measurability, which consists in knowing the target market and data of the people targeted; accessibility, which is the ability to make contact with the customers in the segmented area; responsiveness which is the need to have the same responds from the same target markets. 

Lately, due to its expansion outside the U.S., Netflix has a new segment to target: the geographic segmentation. The geographic segmentation relates to segmenting and targeting markets by regions, countries, and market density. Obviously, Netflix cannot buy all the same movie rights that buys for the U.S., for other countries. Even acting different from one country to another, Netflix must be aware of demographic segmentation as well, and to do so it needs to gather the data of the potential customers that intends to target. Age and gender play an important role in this and it requires precise information in order to satisfy needs and wants. Finally, the usage rate information is also important, in fact it allows Netflix to know who is most inclined to watch its streaming program and who is not, allowing it to make decisions about streaming or not streaming in that segment.