Market is composed of buyers, and buyer are not same in taste and preferences regarding to product and services. Every individual buyer view is different about any product, developing,marketing and selling the products on assumptions waste the investment made on different marketing programs.
Marketing is the art and science of reading buyer’s mind, companies looking for offering the products by identifying the needs,wants and eager to provide solutions in the form of product will win the race in long term. Bad products not always failed in the market but offering a good product in a low demand market result in failure.
It’s for sure there is no company which can claim that they cover complete world markets. Due to limited resources company should try to look for the market where return on investment is high can be called attractive market.
Dividing the heterogeneous market into different distinct group on basis of needs,characteristics or behavior is called market segmentation.Among different segments company can find the most attractive segment but it can be only possible if a detailed research study is conducted and result are evaluated in a proper manner.Rather then offering same marketing mix to all the segments company can tailor it for target segment.
Before selecting the segment Organization should keep in mind the following points.
– Profitable enough
– Scalable for marketing and distribution activity.
– Not change very rapidly
– Easy to reach
– React to marketing mix
– Afford to buy the products.
There are some bases for marketing segmentation, both consumer and industrial market use different basis for segmentation.
Consumer Market Segmentation
A bases are different for the market but it remain same within the segment or group. Marketing manager should take the following basis into consideration on which to segment a consumer market.
Dividing the market on geographic basis such as climate,nations,cities,states,regions,countries or neighborhoods. A company may want to focus on specific geographical area or want to operate in all areas but pay attention to geographical difference in needs and wants.
Dividing the market into groups based on demographic variable such as age,gender,sex,color,religion,class,income,occupation,life cycle and nationality. Demographic factors are the most popular bases for market segmenting customer groups.
Dividing the market into different group based on social class,values,lifestyle and attitude.People in the same demographic group have different psychographic makeup’s.
Dividing the market into groups based on consumer knowledge,usage pattern,response,price sensitivity,brand loyalty and benefit sought.
Business Market Segmentation
Many of the market segmentation bases can be applied to industrial market but some of the bases which are different are the following.
Operating Variables – based on technology,user-nonuser status and customer capabilities.
Customer type – based on factors such as organization size,industry,organizations structure(Centralized or Decentralize).
Buyer Behavior – based on Such as loyalty to supplier,usage pattern and order size.
Situational factor – Such as Urgency of deliver and specific application.
Advantages of Segmentation
-Organization is focused toward relative segments.
-Less marketing expense.
-Selecting proper segments result in high profits.
-Organization closely examine needs and wants of customers.
-Customer satisfaction survey is easy to conduct.
-Better customer service can be provided to product users.