The method to get maximum response from consumers by analyzing the difference in their characteristics following a simple “divide and rule formula” is known as market segmentation. When we look at the market requirements from a broader perspective we will realize that the market constitutes multiple small segments comprising of a cluster of people coming from different sections of the world. These people differ in caste, creed, and culture, and it’s not humanly possible to meet all their requirements following a formula that is common for all. (Kyle ,et.al,2002) This is where marketers use market segmentation, It’s the process of dividing consumers based on their differences and identifying the target audience for a particular product or service. Here we are going to briefly explain the importance and objectives of market segmentation.
Why Is Market Segmentation Important?
Market segmentation helps in segmenting the needs of consumers based on their differences so that marketers can fulfill their requirements. It helps them focus on the needs of their customers and fulfill them. It is important because the market consists of people coming from different cultures having different tastes when it comes to purchasing a particular product or service. If the needs of the customers are not identified and segregated it is humanly impossible for a marketer to deliver all kinds of products and services. Therefore to narrow down the list of consumer requirements marketers need to segregate the market requirements and deliver to their target audience.
- Product Coordination & Marketing Appeals – Market segmentation helps marketers to understand the nature of products and understand consumer requirements. This helps the marketers stock their markets with services and products that the customers are inclined to because of which more and more customers are attracted towards the particular shop.
- Making The Most Of Market Opportunities– Market segmentation loads a marketer with opportunities to build their business. The volume of sales can be estimated through market segmentation which helps marketers identify the areas where their business is prospering and areas where it has been going down the hill. This in turn helps them develop stronger strategies to initiate a course of action to improve sales in non-performing units. (Liu, et.al,2010)
- Allocating A Marketing Budget– Marketing requires funds. The more sugar a marketer is willing to put in the better are the chances of getting the desired results. But in case they land up draining funds without planning it can result in losses. Market segmentation helps marketers allocate a particular budget for marketing. This budget helps marketers plan and frame marketing strategies accordingly they can also prioritize their funding based on the product performance. This means areas where the product sales are meeting the desired targets need not need funds compared to areas that are performing low. The funds for product promotion can be distributed accordingly. To learn how to prepare a marketing budget with the help of market segmentation students can seek assistance from OmanEssay assignment helper.
Basic Criteria For Market Segmentation
Before marketers segment the market based on consumer needs they need to keep these criteria in mind-
- The Segment Should Physically Exist– The primary concern that needs to be kept in mind during market segmentation is that the segment based on which the market is divided truly exist. It should not be something that is a part of a research rather it should be evident. The physical existence of the segments can be proved if the segments can be identified.( Baines,et.al,2003)
- The Segments Should Be Constantly Measured– The second criteria for market segmentation is that the segment based on which the market is divided needs to be measured and the process of identification needs to be continuous. This is because consumer requirements are changing with time therefore based on the market study and the latest ongoing technological trends marketers need to identify different segments that are evolving with time in a continuous process before they move into market segmentation. It further helps in measuring the sales potential of a specific segment. To understand how these segments can be measured in detail students can avail online assignment help from OmanEssay.
- The Segments Should Be Reasonably Stable– Even though marketers are continuously evolving with time to meet consumer demands the segments on which the market will be divided should have a reasonable sustainability. i.e., the reason should be persistent and stable for effective market targeting. If the reason on which the market is divided changes occasionally it becomes difficult for marketers to meet consumer requirements. The stability of the segment determines whether or not it is worthy of the investment.
- Segments Should Be Reachable Through Targeted Distribution– The main purpose of market segmentation is to meet the demand of the consumers effectively. Therefore it is important to see whether or the segments can reach their target audience through market targeting. If the target distribution does not reach the target audience then market segmentation cannot be done effectively. Marketers need to understand the accessibility of the segment, i.e., the extent to which it is reaching to meet consumer demands.
Therefore it can be said that for effective marketing programming and serving customers as per their requirements market segmentation is vital. It helps marketers serve their customers at a bare minimum cost and develop diverse marketing programs. Market segmentation also helps in evaluating and comparing various marketing potentials of the specific services they offer. Before marketers head for market segmentation they must ensure that the segments can be identified and physically exist, they can be measured constantly, the segments should be divided on factors that are reasonably stable and do not change occasionally and can be reached to their target audience through targeted distribution. It is important because it helps in product coordination and marketing appeals, allocating a marketing budget, and making the most of market opportunities. To gather more information on market segmentation students can avail of marketing assignment help from OmanEssay.
Doyle, P., & Saunders, J. (1985). Market segmentation and positioning in specialized industrial markets. Journal of marketing, 49(2), 24-32.
Plummer, J. T. (1974). The concept and application of life style segmentation: The combination of two useful concepts provides a unique and important view of the market. Journal of marketing, 38(1), 33-37.
Loker, L. E., & Perdue, R. R. (1992). A benefit-based segmentation of a nonresident summer travel market. Journal of Travel Research, 31(1), 30-35.
Kyle, G. T., Kerstetter, D. L., & Guadagnolo, F. B. (2002). Market segmentation using participant involvement profiles. Journal of Park & Recreation Administration, 20(1).