Importance of Market Segmentation in Marketing and Business for Service Sector

MARKETING AND
BUSINESS FOR
SERVICE SECTOR

Table of Contents
INTRODUCTION....................................................................................................................3
MAIN BODY............................................................................................................................3
CONCLUSION.........................................................................................................................5
REFERENCES.........................................................................................................................7

Topic- Describe segmentation and its importance. Discuss how marketers segment the
market and identify the variables (bases) used in the most common segmentation approaches.
INTRODUCTION
Segmentation is one of the crucial marketing stay which is a part of STP framework.
This framework is used by companies to segment the target market, plan innovative
strategies, and position their products and service sin effective manner through which
companies can meet their objectives and gain competitive advantage. Market segment is a
category of customers who are put into groups according to their likes and similarities in an
otherwise homogeneous market (Market Segment, 2021). This essay will discuss about the
concepts of segmentation and its importance. The essay will define how marketers segment
market and which variables acts as basis for classifying the marketplace.
MAIN BODY
According to Schiffman and Kanuk, “market segmentation is the term which defines
the process of dividing market into various subsections of consumers which have common
characteristic”. Market segmentation is the approach of STP (segmentation, targeting and
positioning) marketing technique which assist the companies in classifying the market into
different groups through which an organization can divide the target market into sub groups
that can be helpful in meeting the organizational objectives. Segmentation is the marketing
strategy which is helpful for brands and improving their campaign performance by which
second target right people with the right message at right time. This also supports and product
development that can assist an organization in meeting the needs of customers. With the help
of this marketing strategy, company can expand their business in international marketplace
(What Is Market Segmentation, 2019). For example, whole food chain which is currently
operating under Amazon is a grocery store which is following segmentation strategy and
classifying their target market on the basis of high income, health or eco conscious customers
and educated city dwellers.
Market segmentation is also helpful in identifying the right market which will also
allow company to precisely target audience with innovative strategies. By segmenting the
target market, this will support companies in understanding the type of customers which the
company wants to target through it leads and conversions can be generated at higher rate with
effective targeting and positioning strategies. Segmenting plays a crucial role in marketing as
this is the foundation stone of targeting and positioning strategies which will assist company