MARKET SEGMENTATION EXPLAINED
Market segmentation can be described as marketing term referring to the aggregating of prospective potential buyers into teams (segments) that have common requirements and will act in response similarly to a marketing action. Industry segmentation enables companies to different categories of consumers who also perceive the entire value of certain products differently from another. (Definition of Industry Segmentation). Below are some of the conditions can be used to identify different marketplace segments: i. There must be common needs within segment.
ii. The market segment should be exceptional from other groupings.
iii. The industry segment must have a similar response to market. iv. The market portions must be considerable in terms of both purchasing electrical power and size. v. Online marketers must be in a position to effectively enhance to and serve an industry segment. mire. Market sectors must be adequately large to become potentially profitable. vii. The number of segments need to match the firm's features. THE PURPOSE OF INDUSTRY SEGMENTATION
Businesses produce several buyers. The buyers per are not similar but satisfy different standards thereby owned by different markets. Therefore market segmentation acts the following uses taking into consideration the distinct needs intended for the different segments which are: i. Leverage scarce resources.
This is particularly beneficial for tiny companies mainly because it allows focus on markets to be matched together with the company's skills and competencies. In addition this enables the small company to create a guarded specialized niche in the market
2. To ensure that the elements of the marketing mix are designed to meet up with particular needs of different customer groups. As a result a more robust competitive position is established through strategy and best practices. This is certainly more pertinent in the internet age where the companies are large and heterogeneous.
iii. Allows organisations to focus on particular customers needs, in the most effective and powerful way. A firm that targets a mass marketing strategy in a clearly segmented market against those that have even more explicit and targeted approach can find itself falling among many stools. This is important in weak markets exactly where concentrating on development segments may bring new life to a organization. TYPES OF MARKETS
There are 3 key types of markets:
i actually. Consumer Markets:
These are generally markets in which goods or perhaps serviced made will ultimately be used by final consumer. For example loaf of bread is the typical consumer great, as it is baked in a food handling business and purcahased by the consumer directly. ii. Organization Markets:
This is when goods or services purchased are for use either directly or indirectly in the production of other goods and services for reselling. For example espresso which is rooted and semi-processed in Kenya is sold to European businesses more specifically Nescafe where it truly is processed in to coffee that is in turn acquired by the final client. iii. International Markets:
Companies portion international markets produce goods produced enmass for circulation for the international customers either in consumer markets or business markets. As an example Coca-Cola produces the Skol concentrate in its factory in Atlanta Atlanta. They then sell off this concentrate to Pepsi bottlers all over the world. The key to successful category is to identify the buyer and the reasons for buying the goods. The initial part of this kind of paper can mainly concentrate on consumer market segments and the means of segmenting these kinds of markets.
PROCESS OF INDUSTRY SEGMENTATION
There are two primary approaches to segmenting markets:
i. Breakdown Technique: The breakdown method is used most often. It assumes that customers are essentially the same, so promoting professionals need to look for variations in order to define marketing segments. ii. Build-Up Method: The build-up approach assumes that customers are generally different, and so the marketing professional must seek out similarities as being a basis for identifying the...
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(2008). Segmentation and placement principles. In N. N. Graham Hooley, Marketing Strategy and Competitive Positioning (p. 215). Essex: Pearson Education.
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(2008). Segmentation and positioning principles. In In. F. Graham Hooley, Online marketing strategy and Competitive Positioning (p. 219). Essex: Pearson Education.
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Mahajan, W. a. (1981). Designing item and organization portfolios. Harvard Business Review, 155 -65.
Target Market. (n. d. ). Retrieved Mar 5, 2013, from Investopedia: http://www.investopedia.com/terms/t/target-market.asp
Target audience Selection
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