Market Segmentation

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Market segmentation
The definition of market segmentation has been explained differently by different theorists for an instance according to Philip Kotler the definition of, market segmentation means "the act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes", And according to William J. Stanton, "Market segmentation in the process of dividing the total heterogeneous market for a good or service into several segments. Each of which tends to be homogeneous in all significant aspects”, the business dictionary states market segment as an identifiable collection of people, families, businesses, or organizations, which share similar characteristics or are otherwise a homogeneous or equal market[Businessdictionary.com , 2012]. We segment markets for various reasons such as to better match customer needs as segments generally react in a predictable manner to marketing, it also it also helps in creating separate offers for individual segments as customer needs differ. Markets are also segmented in order to enhance profits for businesses this is because individual customers have different disposable incomes therefore they are different in how sensitive their reaction to price can be by segmenting the market businesses can raise average prices and increase profits. Market segmentation also helps to retain more customer’s customer situations change for an instance they may age or have families change profession or even be promoted so by marketing products to appeal to stages in an segments life a business can retain customers who would have otherwise changed to a competing product or brand and most importantly if a business has a strong or leading share of the market then it is probably not maximising profitability, companies can often achieve competitive production and marketing costs and therefore become the preferred choice of customers and suppliers. In other words market segmentation gives small businesses...
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