Procter & Gamble selected the Millennials, a demographic that includes college students, as an untapped group of potential customers for their Febreze line of products. Which step of designing a customer-driven marketing strategy process are they executing?

Segmentation: It divides a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who possibly require separate products.
Targeting: Once the market is segmented, targeting involves gathering more information of each market segment and proceed to select one or more segments.
Differentiation: Once the segment is chosen, the company must decide how it will differentiate from competitors and how it will have a unique way of serving its chosen target segment.
Positioning: is the process of securing a unique space in the minds of consumers in comparison to competitor’s products.

More specifically, targeting refers to the strategy to select potential customers to whom one product wants to be sold to.

A target market is an identified potential group of consumers (which have common characteristics) which are the most likely purchasers of the product.

In this case, Procter & Gamble selected the Millennials (which is a demographic group who share some common characteristics, different than the X-generation, Baby boomers, and other generations) as potential customers of the Febreeze line of products.

Therefore, by selecting a special population as potential customers they are in the phase of Targeting