Market Segmentation
Introduction:
Market Segmentation:
Market segmentation is the process of dividing the market into parts that are different from one another. It is the identification of potential customers who would buy your products. Different customers have different needs and it is not possible to satisfy these needs by treating all customers in a similar way. Most organisations do not have all the resources to satisfy the needs of all the customers. Therefore, it is necessary to identify the similar groups of customers and to serve one or two group with the available resources. When market segmentation is done well the members in each segment of the market are as similar to each other as possible inside a segment and are also as different as possible among segments.
Levels of market segmentation:
1. Mass Marketing: providing the same product to all consumers. Example: Salt. 2. Segment marketing: providing different products to many segments. 3. Niche Marketing: providing different products but to sub segments. 4. Micro-Marketing: providing product which are preferable to individual choices.
Segmentation Variables:
There are four important bases on which market segmentation are carried out amongst consumer markets. They are as follows:
* Geographic * Demographic * Psychographic * Behavioural
Geographic segmentation: This kind of segmentation divides the market on the basis of geographical area. Marketers use geographic segmentation to divide the markets in geographical areas in order to be able to provide products to consumers depending on their different needs. Different geographical areas have different needs and wants. For example, people living in a village will not have the same needs and wants as the people living in a city. Therefore, it is important for marketers to divide the markets into geographical areas. This can be done by region, size, climate, population, etc. A geographical area can be a city, country or just a small area in a
Market Segmentation:
Market segmentation is the process of dividing the market into parts that are different from one another. It is the identification of potential customers who would buy your products. Different customers have different needs and it is not possible to satisfy these needs by treating all customers in a similar way. Most organisations do not have all the resources to satisfy the needs of all the customers. Therefore, it is necessary to identify the similar groups of customers and to serve one or two group with the available resources. When market segmentation is done well the members in each segment of the market are as similar to each other as possible inside a segment and are also as different as possible among segments.
Levels of market segmentation:
1. Mass Marketing: providing the same product to all consumers. Example: Salt. 2. Segment marketing: providing different products to many segments. 3. Niche Marketing: providing different products but to sub segments. 4. Micro-Marketing: providing product which are preferable to individual choices.
Segmentation Variables:
There are four important bases on which market segmentation are carried out amongst consumer markets. They are as follows:
* Geographic * Demographic * Psychographic * Behavioural
Geographic segmentation: This kind of segmentation divides the market on the basis of geographical area. Marketers use geographic segmentation to divide the markets in geographical areas in order to be able to provide products to consumers depending on their different needs. Different geographical areas have different needs and wants. For example, people living in a village will not have the same needs and wants as the people living in a city. Therefore, it is important for marketers to divide the markets into geographical areas. This can be done by region, size, climate, population, etc. A geographical area can be a city, country or just a small area in a
References: * Kotler, Philip, 1997, Marketing Management, 9th edition, pp. 249-268. * David Parmerlee, 2000, Auditing markets, products, and marketing plans, McGraw-Hill Professional. * Marketing best Practices, 2004, Second Edition, Thomson South Western.