Market Segmentation The Baby R Us brand is a store concept of Toys R Us, which is the largest retailer of toys. Baby R Us is a brand extension that specially focuses on supplies and toys for babies, so the under 2 crowd. The target market is different for this concept compared with the target market for Toys R Us. This paper will explain Baby R Us in terms of market segmentation and target marketing.

Target Market

The main Toys R Us concept is a toy store that appeals to a large target market. The toys sold appeal mainly to children under 14, but there is plenty appeal with some of these products to older buyers as well. The company segments its customers in terms of the end users (usually a child) and the buyer (usually a parent or grandparent). The average age of a Toys R Us customer is 43.1 years, which is in line with other major toy retailer (Target and Wal-Mart), and indicates that adults are the ones buying things, no matter who the end user is (Bickle, 2011). The median age is maybe older than expected, but reflects the role that grandparents play in buying toys. Geographically, Toys R Us is a big box store with an emphasis on suburban locations. These are a mix between anchor stores at shopping plazas and standalone stores. The company targets at almost all U.S. markets, and earns around 1/3 of its revenue overseas as well, with Japan being the largest international market (2015 Toys R Us Form 10K). The Baby brand is 38% of U.S. revenues and 20.2% of international revenues (Ibid.)

Baby R Us takes this idea to a more refined niche market. In terms of the end user, the end user is either a baby under the age of two, or the parent of a baby under the age of 2. There are some differences from regular Toys R Us with respect to the product. Baby products sold are not just toys, but...

In many cases, these are much more for the parents than they are for the baby. This differs from selling toys that appeal to toddler and children, as those consumers are old enough to make their own choices about what they want, whereas a baby is completely dependent on its parents and in many cases has no capacity to express a preference. Thus, the buyer is much more the target market at Baby R U.S. than at Toys R Us, where the end user also has to be targeted.
Another distinct element of Baby R Us is the baby registry. This reveals a couple of things about the brand. First, the target market is not just the parents, but the friends and families of the parents. If the company appeals to parents enough that they set up a registry there, friends and families become part of the buyers, and there is a need to convince those buyers to spend more on gifts. So gifts are a more important component of the market segmentation at Baby R Us. Moreover, the brand has to appeal to first-time parents. This is actually important, because parents often re-use items for subsequent children, but almost everything for the first child will be new. The implication here is that the parents are to be targeted before they actually have a baby, and that the most important customers are the ones who have never been considering shopping at the store, but now have a very strong motivation to do so. Finally, the registry provides another dynamic, in that peer groups are important to marketing. Many people have children around the same time as their friends, and as a result of this there is considerable emphasis placed on word of mouth. People who are parents for the first time are likely to talk to those among their peer group who have just gone through, or are going through, the same thing. Word of mouth marketing is…