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MARKETING MANAGEMENT - Market Segmentation, Targeting and Positioning

The logic of Segmentation - Market Segmentation, Targeting and Positioning

   Posted On :  18.06.2018 12:28 am

The concept of market segmentation has helped marketing decision making since the evolution of marketing.

The logic of Segmentation
 
The concept of market segmentation has helped marketing decision making since the evolution of marketing. The goal of market segmentation is to partition the total market for a product or service into smaller groups of customer segments based on their characteristics, their potential as customers for the specific product or service in question and their differential reactions to marketing programs. Because segmentation seeks to isolate significant differences among groups of individuals in the market, it can aid marketing decision making in at least four ways:

1.      Segmentation helps the marketer by identifying groups of customers to whom he could more effectively ‘target’ marketing efforts for the product or service
 
2.      Segmentation helps the marketer avoid ‘trial-and-error’ methods of strategy formulation by providing an understanding of these customers upon which he can tailor the strategy
 
3.      In helping the marketer to address and satisfy customer needs more effectively, segmentation aids in the implementation of the marketing concept
 
4.      On-going customer analysis and market segmentation provides important data on which long-range planning (for market growth or product development) can be based.
 
Although it is a very useful technique, segmentation is not appropriate in every marketing situation. If, for instance, a marketer has evidence that all customers within a market have similar needs to be fulfilled by the product or service in question (i.e. an undifferentiated market), one ‘mass’ marketing strategy would probably be appropriate for the entire market. However, in today’s market environment, it is unlikely that one would find either an entirely homogeneous market,
 
Activity 1.6.1

Consider the toothpaste market. Nearly everyone uses it. Yet, the toothpaste manufacturers have found that consumers have different ideas about what they would like the product to do. Prepare a list of what consumers want their toothpastes to do to them.
 
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Criteria for Segmentation


If segmentation has to be useful in marketing decision making, then it must possess the following characteristics:
 
1.      Segments must be internally homogeneous --- consumers within the segment will be more similar to each other in characteristics and behaviour than they are to consumers in other segments.

 2.      Segments must be identifiable --- individuals can be ‘placed’ within or outside each segment based on a measurable and meaningful factor
 
3.      Segments must be accessible --- can be reached by advertising media as well as distribution channels. Only then, the segments can be acted upon.
 
4.      Segments must have an effective demand --- the segment consists of a large group of consumers and they have the necessary disposable income and ability to purchase the good or service. 
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