You could segment the market for early pregnancy tests based on demographics such as age and income, or you could segment the market based on consumers' price sensitivity. But in this situation, it is useful to ask why: Why would a woman want to take a pregnancy test? And are these reasons the same for everyone? A little bit of thought would suggest that there are two groups of women: hopefuls, those who want to be pregnant, and fearfuls, those who are afraid that they might be pregnant.
How would you identify these two segments and market to them differently? Often companies offer multiple products that appeal to different market segments and let customers self-select. That is, the firm does not identify customers in various market segments; instead, the customers reveal their market segment identity by choosing different products. Quidel, a company based in San Diego, California, created two different products to appeal to two segments in the market for early pregnancy tests: the hopefuls and the fearfuls. The actual test products were almost identical, but the two products were given different names and package designs, were placed in different aisles of a drugstore, and were priced differently.
 |
 |
 |
The Hopefuls | The Fearfuls |
|---|---|---|
|
Conceive |
RapidVue |
|
|
$9.99 |
$6.99 |
|
|
Pink box, smiling baby |
Mauve background, no baby |
|
|
Near ovulation-testing kits |
Near condoms |
The decisions about brand name, packaging, and shelf placement were easy and straightforward. Pricing was a bit trickier because both segments could be price-sensitive for different reasons. Later research by Quidel, completed after the table here was created, revealed the hopefuls to be less—not more—price-sensitive than the fearfuls. This research led to the final pricing decision by the company, which is not shown here.