Segmentation Analysis Literature Review

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Segmentation Analysis Literature Review

By | October 2008
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Segmentation Analysis Literature Review

To match the needs of costumers, consumers and producers, not only in case of private people but of businesses or companies, target marketing is needed. To obtain the particular market firstly a marketer has to prepare a market research, after which he segments the market, and then targets a single segment or series of segments, and finally positions within the segment(s). From these processes, I have chosen Segmentation Analysis as the topic of this essay, because it is a crucial element in the “formula” of marketing. In marketing plans mass media strategies are very popular, but it is dangerous to rely on them entirely. In addition, Swenson (1990) says, “Such strategies are no longer as efficient or cost-effective as they once were in that the marketplace is changing. We have moved from a manufacturing-driven to a consumer-driven economy; the mass media itself is fragmenting; we are celebrating ethnic and social diversity, rather than pouring everyone into a homogeneous mould; and the growth rate of the population is slowing with a resultant impact on the demand for goods and services”. Furthermore, segmentation is after market research the first step in STP and herby the second most important in the marketing process. Moreover, if from a marketing strategy a proper segmentation is missed, it will definitely harden the targeting, positioning and easily mislead the whole process.

According to KnowThis LLC (1998-2008) the proper definition of Market Segmentation is the following:

“Because people are different and seek different ways to satisfy their needs, nearly all organizations, whether for-profits or not-for-profits, industrial or consumer, domestic or international, must use a Market Segmentation approach to target marketing. This approach divides broad markets, consisting of customers possessing different characteristics, into smaller market segments in which customers are grouped by characteristic shared...

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