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Marketing Segmentation
A market consists of large number of individual customers who differ in terms
of their needs, preferences and buying capacity. Therefore, it becomes necessary to
divide the total market into different segments or homogeneous customer groups.
Such division is called market segmentation. They may have uniformity in
employment patterns, educational qualifications, economic status, preferences, etc.
Market segmentation enables the entrepreneur to match his marketing efforts to
the requirements of the target market. Instead of wasting his efforts in trying to sell
to all types of customers, a small scale unit can focus its efforts on the segment
most appropriate to its market. It is defined as The strategy of dividing the market
in order to consume them.
According to Philip Kotler, It is the subdividing of market into homogenous
subsets of consumers where any subset may be selected as a market target to be
reached with distinct Marketing Mix
According to Philip Kotler, market segmentation means "the act of dividing
a market into distinct groups of buyers who might require separate products and/or
marketing mixes."
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."
Basis of Segmentation:
Market segmentation dividing the Heterogeneous market into homogenous
sub-units. Heterogeneous means mass marketing, which refers people as a people.
Homogeneous means dividing the market into different sub units according to the
tastes and preferences of consumers. The following factors are considered before
dividing the market:
1. Geographical Factors: On the basis of geographical factors, market
may be classified as state-wise, region-wise & nation-wise. Many companies operate
only in a particular area because people behave differently in different areas due to
various reasons such as climate, culture, etc.
2.
Demographic Factors: This is the most widely used basis for market
segmentation. Market is classified on the basis of population, using ages, income,
sex, etc as indicators.
b. Upper-upper class
c. Lower-
d. Middle class
middle class
e. Upper-middle class
f. Lower-
g. Lower class
h. Upper-lower class
i. Lower-lower
class
In our country, it is classified as upper class (rich), middle class, & the
lower class. Another classification based on income in our country is as follows:
a. Very Rich
Destitute.
d. The
5. Behavior Factors: This is one of the most important bases used for
market segmentation. Market is classified on the basis of attitude of consumers and
special occasions.
a. Occasions: Sellers can easily find out certain occasions when people
buy a particular product. E.g.: Demand for clothes, greeting cards, etc increases
during the festival season. Demand for transportation, hotels etc increases during
the holiday seasons.
b. Benefits: Each consumer expects to fulfill certain desire or to derive
some benefits from the product he purchases. E.g.: A person may purchase clothes
to save money & another to impress others. Based upon this, markets may be
classified as markets for cheap price products & market for quality products etc.
c. Attitude: On the basis of attitude of consumers, markets may be
classified as enthusiastic market, indifferent market, positive market, & negative
market.
promising segments only. Thus due to market segmentation, marketing efforts are
given one clear direction for achieving marketing objectives.
8) Facilitates effective advertising: Advertising media can be more
effectively used because only the media that reach the segments can be employed.
It makes advertising result oriented.
9) Provides special benefits to small firms: Market segmentation offers
special benefits to small firms. The resources available with them are limited as
they are comparatively new in the market. Such firms can select only suitable
market segment and concentrate all efforts within that segment only for better
marketing performance. Such firms can compete even with large firms by offering
personal services to customers within the segment selected.
10) Facilitates optimum use of resources: Market segmentation
facilitates efficient use of available resources. It enables a marketing firm to use its
marketing resources in the most efficient manner in the selected target market. The
marketing firm selects the most promising market segment and concentrates all
attention on that segment only. This offers best results to the firm in terms of sale,
profit and consumer support as compared to the results available from spending
such resources on the total market.
In conclusion, it can be said that market segmentation offers benefits not
only to marketing firms but also to customers. The marketing job will be conducted
efficiently and the available resources will be utilised in a better mariner. These
advantages also suggest the importance of market segmentation and make a case
in its favour.