segments. A ‘market’ after all is the aggregate of consumers of a given product. And, consumer (the end user), who makes a market, are of varying characteristics user and buying behavior. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing 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. 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. Since it is virtually impossible to cater for every customer’s individual characteristics, marketers group customers to market segments by variables they have in common. 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 gurus/experts have described segmentation as a strategy of dividing the markets for conquering them.
MARKETING STRATEGY AND MARKET SEGMENTATION: - When it comes to marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) – maybe extended by three more Ps for marketing services (People, Processes, Physical Evidence). Market segmentation and the identification of target markets, however, are an important element of each marketing strategy. They are the basis for determining any particular marketing mix. Basic steps in marketing strategy are as follows:~ 1
• ATTRIBUTES OF EFFECTIVE SEGMENTATION
Market segmentation is resorted to for achieving certain practical purpose. For example, it has to be useful in developing and implementing effective and practical marketing programmes. For this to happen, the segments arrived at must meet certain criteria such:a. Identifiable: The differentiating attributes of the segments must be measurable so that they can be identified.
b. Accessible: The segments must be reachable through communication and distribution channels.
c. Sizeable: The segments should be sufficiently large to justify the resources required to target them. A very small segment may not serve commercial exploitation.
d. Profitable: - There is no use in locating segments that are sizeable but not profitable.
e. Unique needs: To justify separate offerings, the segments must respond differently to the different marketing mixes.
f. Durable: The segments should be relatively stable to minimize the cost of frequent changes.
g. Measurable: The potential of the segments as well as the effect of a specific marketing mix on them should be measurable.
h. Compatible: - Segments must be compatible with firm’s resources and capabilities.
• REASONS FOR MARKET SEGMENTATION
Segmentation is the basis for developing targeted and effective marketing plans. Furthermore, analysis of market segments enables decisions about intensity of marketing activities in particular segments.
A segment-orientated marketing approach generally offers a range of advantages for both,...