The whole market consists customers with different preferences. Each group of consumers has different needs and wants to be satisfied. Market segmentation helps to discover people with similar characteristics. Show
Modern markets are not homogeneous. There are many markets that exist to meet the needs and wants of car drivers, students and investors. The market can therefore be divided into different parts because one group of consumers often wants something completely different from other groups. What is market segmentation?Market segmentation is the process of splitting the market into different segments. When dividing the whole market into different segments, each segment represents a part of the whole market. Each segment consists of different types of customers which represent distinct subgroups. Hence, market segmentation is the process of identifying different segments within a market and offering different products to them depending on different preferences. What is a market segment?Market segment is a distinct group of customers with similar characteristics, a sub-group of the market with common needs and wants. Each part of the market is known as a market segment. Why businesses do market segmentation?Business organizations segment their markets for many various reasons. But, the most important is that thanks to dividing the market into different market segments, it is way easier to analyze which group of customers is likely to buy a product and then target that particular group. Let’s take a look more reasons why companies do market segmentation:
The process of market segmentation, targeting and positioningMarket segmentation involves aggregating prospective buyers into groups that have common needs and will respond similarly to the marketing actions. Therefore, start with identifying market needs. There are benefits in terms of specific up-to-date product features, controlling expenses, meeting quality expectation leading to savings in time and convenience. STEP 1: Market Segmentation:1. Identify bases for segmenting the market. 2. Develop segment profiles (consumer profiles). Criteria for market segmentation include:
STEP 2: Market Targeting:3. Develop measures of segment attractiveness. 4. Select target segment(s). The groups that result from the market segmentation process are called market segments, a relatively homogeneous collection of prospective buyers. STEP 3: Market Positioning:5. Develop product positioning for target segment(s) based on Price vs. Quality. 6. Develop a Marketing Mix for each segment in terms of Product, Price, Place and Promotion. Advantages of market segmentationWhichever way to segment a market is chosen to divide the entire market into smaller groups, separating consumers into different groups has both benefits and drawbacks many Advantages of market segmentation include the following aspects:
Disadvantages of market segmentationDisadvantages of market segmentation include the following aspects:
When is market segmentation successful?In order to determine whether market segmentation works or not, marketing managers often use the acronym DAMAS. It uses the following criteria to judge markets segments: ✅ (D) Distinct. Unique segments different from one another which will respond to different Marketing Mixes for each segment. ✅ (A) Actionable. Each market segment will be willing and able to buy the suitable products provided by the firm. ✅ (M) Measurable. Market segments are quantifiable when it comes to their size, purchasing power in volume and value as well as growth potential. ✅ (A) Accessible. The firm is able to distribute products to customers in every segment in a cost-effective and efficient way. ✅ (S) Substantial. Each of the segments target by the business must have a decent enough size to make an impact on the firm’s Profit and Loss Account (P&L Account). It is of course possible for a business organization not to effectively carry out market segmentation. The reason for it is that successful markets segmentation must lead to having a clear picture of the consumers in the target market that the business is aiming to sell its products to. Uses of market segmentation help to sell more products as specific problems are solved. And, it increases profits. In this video, I am talking about ‘Market Segmentation – How to Identify Different Consumer Groups?’. Link: https://www.youtube.com/watch?v=xUTwp-YE2NE What is a specific group of consumers who have similar wants and needs?A target market is a specific group of consumers who have similar wants and needs. The goal is to convert consumers into customers. The purpose of marketing is to connect businesses with their customers.
What are the 4 types of customer markets?There are four primary types of consumer markets, including:. Food and beverage. The food and beverage segment of the consumer market is expansive and includes every vendor that sells food and beverages directly to consumers. ... . Retail. ... . Consumer goods. ... . Transportation.. What can you use to describe a group of consumers with similar sets of needs?A market segment is represented by a group of consumers who have similar needs and wants. Accordingly, companies should focus on the industry that they have the greatest chance of satisfying.
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