The Process of Market Segmentation
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Added on 2019-10-01
The Process of Market Segmentation
Added on 2019-10-01
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1 Segmentation in consumer and business marketsMarket segmentation is considered to be that strategy which can be implemented within an organisation based on its performance. The process of segmentation helps in targeting a specifiedgroup of customers, which helps in building a brand which in a way will be sustainable as well as it can provide assistance for developing the market further so as to gain a position based on the overall parameter. But, before diving in to the vast arena of market segmentation, the marketing mix must be comprehended and in so doing the seven P’s of the mix must be understood so that strategy can be developed to cover seven P’s based on the desired target segment. [ CITATION Jia18 \l 1033 ]1.1. A market can be defined as the combination of the buyers both actual and the potential and basically is focussed on the customers who have the specific needs. But, it is not often that the market has to be homogeneous and also it is not desirable and practically impossible that the customer will have same set of needs, since they are varied often. So, when one is into defining the word market, then foremost thing is to decide on the actual boundaries which makes one market distinguishable from other, and this must be done inevitably, since defining the market can only help the organisation to rise high, since this is the process where the management of thebusiness if in parity with the marketing activity, can only determine the goal and help the organisation to achieve the desired mission. As soon as the market is defined, it will only then bepossible to increase the size of it, and evaluation can be sorted based on the potential aspect of it and the monitoring of changes will be smoother, and hence behaviour of the customers will reflect and the possible competitors can also be identified. [ CITATION Kot04 \l 1033 ]
1.2.Mapping of a market is the analysis which is done on the overall grouping of the customers, where the multi- functional nature of the market gets developed and then a view is generated where the separate and the distinct need get identified based on these the determinationof profit is created against the very fact that the need of the customers to be met must be done keeping in mind the generation of profit [ CITATION Har99 \l 1033 ]. So, basically, market mapping is the process of identification where the decision involved in the substitution or the alternate offers are lined up and in so doing distribution along with the value-added chain gets in place to establish them with the final users i.e. the customers and also the suppliers for both the products and also the services. So, market maps clearly identify three things, it defines the end product users, i.e. the consumers and creates a channel for distribution and then keeps a parity with the suppliers, and for certain specific markets, advisory groups or the group of consultants are also maintained. [ CITATION Lan88 \l 1033 ]1.3.Market segmentation can be defined as the process of dividing a market into different homogeneous groups of consumers. Market consists of buyers and buyers vary from each other in different ways. Variation depends upon different factors like wants, resources, buying attitude,locations, and buying practices. By segmentation, large heterogeneous markets are divided into smaller segments that can be managed more efficiently and effectively with products and services that match to their unique needs. So, market segmentation is beneficial for the companies serving larger markets. Consumer and business markets cannot be segmented on the bases of same variables because of their inherent differences. [ CITATION ECH80 \l 1033 ]The variables that are involved in consumer market segmentation, are as follows: Geographic segmentation is based on variability of geographic needs and wants.
Demographic segmentation is considered crucial since it involves the full mankind, and the variables includes, sex, race, etc. Psychographic segmentation involves, mix within the social class, or that of the lifestyle and alsothe personality characteristics.Behavioural segmentation is made based on the knowledge of the consumers and their attitude and also their use and response for certain specific products. [ CITATION Alv87 \l 1033 ]But, the bases for Business Market Segmentation is on the consumer market variables, that there is the need of certain considerations, like fewer businesses purchasing bulk orders, or there is anykind of inherent differences, but are mainly concluded on variables, like that of the size of the company, or the type of industry it is serving or the approaches relating to the purchase which is based solely on the existing relationships and the usage of the products or the seasonal trends i.e. broadly classified as the situational factors and most importantly, the growth rate region wise andalso the concentration of the customers covering the macroeconomic factors. [ CITATION Ran06 \l 1033 ]1.4. So, the standards for choosing Market Segments is based on the fact that they're going to be Measurable, so one will tell about what percentage of potential customers. 2ndly, it should be accessible through channels that is by way of communication and also through distribution, 3rdly, it should have sturdiness or that is to say persistent and also constant, so the phase doesn't suffer frequent changes in it. 4thly to create it substantial, the dimensions of the phase should be massive enough for warranting as a phase and conjointly massive enough to create it a lot of
profitable. For satisfying distinctive wants, segments ought to totally vary in their response to different selling efforts i.e. the selling combination. [ CITATION RHu14 \l 1033 ]1.5.Market segmentation is considered to be important because the method of dividing a market into completely different undiversified teams of customers, helps in focusing on a particular group and in one time. Market consists of innumerable customers and the consumers vary from one another in several ways that. Variation is dependable on multiplicity of factors like needs, or may also be resources, and also the attitude of the buyers, locations, and also the practices involved in buying. By segmentation, massive heterogeneous markets area unit divided into smaller segments that may be managed a lot of expeditiously and effectively with merchandise and services that match to their distinctive desires. So, market segmentation is useful for the businesses serving larger markets.[ CITATION PVe15 \l 1033 ]2. Target market segments for an organization2.1 Marketing management in an organisation is structured below the subsequent choicesUndifferentiated marketing approach depends upon one product and therefore the strategy focuses on a whole target market instead of a phase of it, and to attractiveness to as many purchasers as potential to shop for it, i.e. the product which might be marketed effectively to shoppers having similar wants for the product.Concentrated or rather targeted marketing involves the planning and creation of a product to focus on one market phase, tailored for a particular phase with the flexibility to specialize to own
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