There are several advantages of segmentation
There are several advantages of segmentation.
1) Company focus - Targeting market segments is one the most effective way which helps in increasing the focus of a firm. Better focus leads to better returns. Companies generally base their marketing strategy completely on a target segment which in turn increases the firm’s focus and also profitability.
2) More competitiveness- generally, once the firms focus increases then the competitiveness in the market will also increase. For example, if the firm is concentrating on youngsters, then the brand equity in youngsters will be high. Automatically the market share of the firm might also increase and the chances of new competitors will be low. In a holistic view market segmentation increases the competitiveness of the firm.
3) Expansion of market- one of the market segmentation where expansion is immediately possible is geographic segmentation as it is easy to expand to nearby territories once you are catering a particular territory. Segmentation plays a crucial role in expanding the market. It is necessary to know the kind of customer you will be meeting.
4) Customer retention- customer retention could be encouraged through the life cycle of a customer. Best examples of this could be automobile and the airlines segment. Eg: Titan, which plans through the life cycle of the customer, it has them by price segment.
5) Helps in better communication- promotions is the best way to communicate to the customers. Market segmentation helps the company to communicate to the right customers in the right way, about the right product.
6) Profitability- Segmentation helps in increasing competitiveness, brand recall and equity and also customer retention and also better communication. These all helps in increasing the profitability of the company which is the ultimate objective of every company.
1) Company focus - Targeting market segments is one the most effective way which helps in increasing the focus of a firm. Better focus leads to better returns. Companies generally base their marketing strategy completely on a target segment which in turn increases the firm’s focus and also profitability.
2) More competitiveness- generally, once the firms focus increases then the competitiveness in the market will also increase. For example, if the firm is concentrating on youngsters, then the brand equity in youngsters will be high. Automatically the market share of the firm might also increase and the chances of new competitors will be low. In a holistic view market segmentation increases the competitiveness of the firm.
3) Expansion of market- one of the market segmentation where expansion is immediately possible is geographic segmentation as it is easy to expand to nearby territories once you are catering a particular territory. Segmentation plays a crucial role in expanding the market. It is necessary to know the kind of customer you will be meeting.
4) Customer retention- customer retention could be encouraged through the life cycle of a customer. Best examples of this could be automobile and the airlines segment. Eg: Titan, which plans through the life cycle of the customer, it has them by price segment.
5) Helps in better communication- promotions is the best way to communicate to the customers. Market segmentation helps the company to communicate to the right customers in the right way, about the right product.
6) Profitability- Segmentation helps in increasing competitiveness, brand recall and equity and also customer retention and also better communication. These all helps in increasing the profitability of the company which is the ultimate objective of every company.