Report on Market Segmentation in Consumer and Business Markets

This report provides a comprehensive analysis of market segmentation in both consumer and business markets. It defines market segmentation, explains the importance of market mapping, and details the variables used in segmenting consumer and business markets, including geographic, demographic, psychographic, and behavioral factors. The report discusses standards for choosing market segments, the significance of market segmentation for businesses, and different marketing approaches such as undifferentiated, concentrated, and differentiated marketing. It also covers the process of targeting market segments, including the use of objective criteria and weighting systems. The report further delves into brand positioning, the marketing mix (7 Ps), and positioning problems such as under-positioning, over-positioning, and confused positioning. The report provides insights into how businesses can effectively divide their markets, target specific customer groups, and position their products or brands to achieve a competitive advantage.

1 Segmentation in consumer and business markets
Market 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 specified
group 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. (Jiapeng Liu, 2018)
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 the
business 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 be
possible 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. (Kotler, 2004)

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 determination
of 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 (Harrell GD, 1999). 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.
(Lancaster G. and Massingham, 1988)
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. (E. C. Hackelman and J. M. Duker,
1980)
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 also
the 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. (H, 1987)
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 any
kind 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 and
also the concentration of the customers covering the macroeconomic factors. (Ran Kivetz, 2006)
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. (R Huang, 2014)
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. (P Venter, 2015)
2. Target market segments for an organization
2.1 Marketing management in an organisation is structured below the subsequent choices
Undifferentiated 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

advantage of company to focus its resources to achieve competitive advantage against larger
firms.
In Differentiated marketing approach an organization develop many product versions and targets
totally different market segments with specific selling mixes, every aimed toward a special
market phase, and customised specifically for a selected phase
Developing a market segmentation and then they will be chosen Market segmentation may be
employed by minor players however needs comprehensive analysis of the known segments,
within the market to achieve a grip in a very specific niche with ulterior targeting strategy by
distinguishing a chance on suitableness for the business and availableness of resources, however
circuitously targeting it to another existing brand. (Muthukrishnan, 2015)
2.2 When it involves market strategy, it's vital to differentiate between the available and
obtainable markets. Market segmentation breaks down the target market in to available market,
that is that the total revenue chance for the merchandise or service therefore offered and into
smaller, a lot of manageable teams. On the opposite hand, obtainable market is that the portion of
the available marketplace for that one will realistically vie, that permits firms to higher serve
customers by characteristic them and conjointly selling to a completely different merchandise
and services to different shopper sets supported several factors, as well as geographic or other
alternative constraints, etc. (McCarthy, 1960)

2.3 The following table depicts the system to assist targeting, and the main focus is laid on
objective criteria with weighting and scoring mechanism
Segment
1 2 3
Criteria Weighting Score Weighted Score Weighted Score Weighted
New product
incorporation
0.10 4 0.40 3 0.30 6 0.60
Competitive positioning
0.20 6 1.20 2 0.40 9 1.80
Cost to reach targets
0.30 7 2.10 6 1.80 1 0.30
Rate of growth
0.10 3 0.30 8 0.80 6 0.60
Compatibility 0.30 8 2.40 5 1.50 5 1.50
1.0 28 6.40 24 4.80 27 4.80
3. Positioning a product
3.1 Brand Positioning may be outlined as that activity that refers to the place that a whole
occupies within the mind of the client by making a whole supply in such a way to mirror
however it's distinguished from merchandise from competitors, so it occupies a particular place
and worth within the target customer’s mind. so as to position merchandise or brands,
corporations could emphasize the identifying options of their whole. it's associate unaided high
of mind recall and that they could attempt to produce an appropriate image. It intends to remain
with the proposition through the selling combine. whole Positioning involves distinguishing and
crucial points of similarity and distinction and once a whole has achieved a robust position, it
will become tough to reposition it. So, positioning the whole are influenced by the competitive
stance the corporate need to adopt and is one among the foremost powerful selling ideas

accustomed ascertain the proper whole identity and to make a correct whole image. (Urban,
1993)Originally, positioning centered on the merchandise and directed selling strategy, and later
enclosed building a product's name and ranking among competitor's merchandise by explaining
the whole details with the individuality and also with the antecedent to set it as an accustomed
way to occupy minds of target customers, however currently it's a daily selling activity or
strategy and is taken into account because the base for developing and increasing the specified
information and perceptions of the purchasers. A positioning strategy will usually be used, or
changed slightly, therefore on service aside from the competitors, as a tool to accommodate
going in foreign markets. (Möller, 2006)
3.2 The marketing mix refers are actions which are used by the company to promote its brand
or in other words the product in the market. (Dontigney)
The seven Ps of marketing mix are:
Price, which is the value that is added to the product or the services so offered.
Product, is the thing which is actually offered for sale.
Promotion are those actions or activities which are used in order to make the segments aware of
the products or the services so offered.
Place is the selling point, or in other words the location, for example it can be online portal or
any physical place of business.
People is referred to the employees who renders the service to the company. (Low, 1997)
Process affect the execution and the perception for the product so designed.

Physical Evidence is the proof of presence of the business, i.e. the tangible aspect of the product
or service so offered. (RB, 2007)
3.3 When referring to the positioning problems, the underlying theory is that that the
positioned product does not met the basic concept, which in other words mean that it in a way
failed to appeal the customers.
An under- positioned product fails to depict vivid proposition to the target end customers, due to
the fact that it is vague and have not appealed to the customers.
On the other hand, over- positioning is over emphasising on few points related to the product
which creates narrow perception and finally loses parity.
Confused positioning relates to customers being puzzled due to under positioning or due to over
positioning, i.e. customers become confused with the description in such a way that they
ultimately lose the appeal over it. (Ashe-Edmunds, 2017)
Doubtful positioning does not seem to have any credibility to the target customers and often runs
into losing the customer by the business.
3.4 Repositioning is too hard a decision to take and nevertheless is too hard to implement. The
challenges are many and they include:
Loss of existing sales by making it moved away from their current position.
Change of perception which requires to forget the previous understanding of the product.

Repositioning makes the business to be disrupted by competitors, who then try hard to confuse
by highlighting that the competitor is in a superior position to offer.
Low-involvement purchases undertakes that the consumer needs are re-educated and in so doing
the consumer becomes disinterested. (Lancaster G. and Massingham, 1988)
Repositioning can be expensive, since the product get modified along with the substantial
communications cost.
In order to do a successful repositioning, some changes are desirous which include changes to be
incorporated in the marketing mix as well.
3.5 Depositioning must be incorporated with effective precision and the whole thing is based
on the fact that depositioning involves paying attention to the conflicting scenarios so that the
customers’ mind can be positioned from an inflated perception of competitors to that of the own
business, so embark upon new concepts. (Smith, 1956)

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