Market Segmentation

Description of Market Segmentation. Explanation.

Definition Market Segmentation. Description.

Market Segmentation is the marketing process of identifying and breaking up the total market into groups of potential customers with similar motivations, needs, characteristics or behavior, who are likely to exhibit homogeneous purchase behavior. Undertaking this process allows marketing efforts to be targeted at select groups. In determining their segmentation strategy, organizations can choose to pursue the whole market with a single offer (Mass Marketing), pursue only certain segments with specific offers (Niche Marketing) or pursue individual customers with specific offers designed just for them (Customization).

The process enables a company to develop a suitable Marketing Mix for each of the chosen market segments. A Market Segment is a (relatively) homogeneous group of customers with similar characteristics, wants, needs or behaviors that is likely to respond similarly to a given marketing mix.
 

5 Ways or bases of market segmentation

1. Geographic Segmentation.

2. Demographic Segmentation (age, gender, income occupation etc). Compare: JICNARS Scale

3. Psychographics Segmentation (values, attitudes, social class, lifestyle and aspirations). Compare: Values and Lifestyles

4. Behavioral Segmentation (occasion, benefits sought, loyalty status, user status, buyer readiness).

5. Product differences.

Steps in segmentation. Process

1. Identify the total market.

2. Determine the segmenting dimensions.

3. Profile each segment.

4. Assess segment attractiveness.

5. Select target market.

6. Determine positioning (marketing mix) for each segment.

Strengths of Segmentation. Benefits

• Organization get to know its customers better.

• Provides guidelines for resource allocation.

• It helps focus the strategy of the organization.

Limitations of the Segmentation. Disadvantages

• Targeting multiple segments increases marketing costs.

• Segmentation can lead to proliferation of products.

• Narrowly segmenting a market can hamper the development of broad-brand equity.

Book: Dowling, G. - The art and science of marketing; Marketing for marketing managers -

Book: Kotler, P., Brown, L., Adams, S. & Armstrong, G. - Marketing, 6th edition -

Book: Simpson, P.M. - Marketing segmentation and target markets; Marketing best practices; 2nd edition -

Forum

- Uganda

Market Segmenting Process

"This article discusses and explains the various steps in the market segmentation process and criteria used in determining and selecting competitive segments."

0

obert zuka - zimbabwe

Psychology

"Question- What is market segmentation and how is the practice of market segmentation related to the marketing concept"

1

- USA

Segmentation and Marketing Mix

"Segmentation and the Marketing Mix are interrelated because one can know by segmenting targeted customers into individual groups how to come up with a product that best suits the needs of each group, can determine the best pricing strategy based on the individual group needs, where to best distribute and make available the product for each individual group, and how to best promote the product to appeal to each group."

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abbas iqbal - U.A.E

tips on disadvantages on segmentation

"i kindly request you to please provide with some more limitations or disadvantages of segmantation as these given here are a little less.Thank you"

4

John - Nigeria

Segmentation and Marketing Mix

"How are Segmentation and the Marketing Mix interrelated?"

0

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Compare with: 3 C's (Ohmae)  |  Multi Channel Marketing  |  Target Marketing  |  Positioning  |  Marketing Mix  |  Extended Marketing Mix (7-Ps)  |  4S Web Marketing Mix  |  Competitive Environment  |  Competitive Intelligence  |  Competitive Position  |  Values and Lifestyles  |  Profit Pools  |  SOSTAC

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End of description Market Segmentation. An explanation.