HI 5004 Marketing Management
Jas Paul Chawla
S M Abdullah Al Mamun (HBD2079)
Table of content
3.The Concept of Market Segmentation5
4.The Process of Market Segmentation5
10.Market Segmentation Limitations8
11.The Positioning Concept9
This paper looks at the use of market segmentation as a tool for improving customer satisfaction in insurance service delivery. Insurance companies are always seeking alternative ways to improve the level of satisfaction among their customers; market segmentation may be a useful tool. The paper argues that in spite of the egalitarian approach that underpins the marketing of insurance, market segmentation may be used to better serve the needs of their customers. In utilizing market segmentation, the insurance companies must pay particular attention to barriers that may negatively impact the effectiveness of the market segmentation exercise.
Consequently, the need to pay particular attention to issues relating to barriers to implementing market segmentation is highlighted. This paper also attempts to address management’s concerns about the practicality and usefulness of segmentation.
The market for any product is normally made up of several segments. There are different aspects contributing for varying mind set of consumers. It is natural that many different segments occur within a market. In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation. Thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in that way that difference between buyers within each segment is as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix. The importance of market segmentation results from the fact that the buyers of a product or a service are no homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviors. These common characteristics allow developing a standardized marketing mix for all customers in this segment. Through segmentation, the marketer can look at the differences among the customer groups and decide on appropriate strategies/offers for each group. This is precisely why some marketing experts have described segmentation as a strategy of dividing the markets for conquering them.
Ever wondered why marketers target only convinced markets and how these markets can identified? Think about vehicle industry of Toyota for a moment, how do they identify which customer are interested about Toyota vehicle? What standard do they use? Do they base it on their income, age, social status or is it just about business or job purposes? Do they market to upper class and middle class customer in a different way, what about low income level and mid income level customer groups - is this difference important for the effective marketing of vehicle industry to prospective customer?
The Concept of Market Segmentation
Market segmentation is the division of a market into different types of customers with particularly similar needs and product or service requirements. In other word, market segmentation is the partition of a mass market into particular and different groups or segments, each of which...