Market Segmentation
Market segmentation is the process of grouping buyers into different categories on the basis of their common needs, desires and requirements. It is the strategy of subdividing the target market into sub-groups of consumers with definable, distinct and homogeneous characteristics so that a different marketing programme can be set up for each group. This will result in an enhancement in the satisfaction to the consumers and profit to the marketer.
According to Professor Philip Kotler, “Market Segmentation is the sub-dividing of a market into homogeneous sub-sects of customers where any sub-set may conceivably be selected as a market target to be reached a distinct marketing mix”.
ATTRIBUTES OF EFFECTIVE SEGMENTATION
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.
PROCEDURE OF MARKET SEGMENTATION
1. Assess the difference between one customer group and others in terms of their needs and their likely responses to the product offered by the company.
2. Find out what are the factors that influence in grouping certain customers into a particular segment.
3. After studying the above aspects, group the customers into
According to Professor Philip Kotler, “Market Segmentation is the sub-dividing of a market into homogeneous sub-sects of customers where any sub-set may conceivably be selected as a market target to be reached a distinct marketing mix”.
ATTRIBUTES OF EFFECTIVE SEGMENTATION
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.
PROCEDURE OF MARKET SEGMENTATION
1. Assess the difference between one customer group and others in terms of their needs and their likely responses to the product offered by the company.
2. Find out what are the factors that influence in grouping certain customers into a particular segment.
3. After studying the above aspects, group the customers into