Market segmentation
Market
segmentation is the identification of the parts of the market that are
different from each other. Segmentation allows that the company to better meet
the needs of potential customers.
The
need for a market Segmentation
The
concept of marketing calls for understanding of customers and their needs
better than the competition. But different customers have different needs, and
it is rarely possible to satisfy all customers by treating them as.
Mass
marketing refers to the treatment of the market as a homogeneous group and
offering the same marketing mix to all customers. Mass marketing allows
economies of scale to achieve through mass production, mass distribution and
mass communication. The disadvantage of mass marketing is that customer needs
and preferences differ, and the same offering is unlikely to be regarded as
optimal by all clients. If the companies ignored differing them customer needs,
probably another firm would enter the market with a product that serves a
specific group, and companies belongs would lose those customers.
Target
marketing as it recognizes the diversity of customers and does not try to please
everyone with the same offering. The first step in the commercialization of the
target is to identify the different segments of the market and their needs.
Needs
of market Segments
In
addition to having different needs, for the segments to be pragmatic that they
should be evaluated according to the following criteria:
Identifiable:
the attributes of differentiation of the segments must be measurable so that
they can be identified.
Accessible:
the segments must be accessible through channels of communication and
distribution.
Important:
segments must be sufficiently important to justify the resources to target
them.
Special
needs: to justify separate offers, segments must react differently for
different mixtures of marketing.
Durable:
the segments should be relatively stable to minimize the cost of frequent
changes.
A
good market segmentation will result in members of segment which are
homogeneous in internal and external heterogeneous; that is, as similar as
possible within the segment and as different as possible between the segments.
Bases
for segmenting consumer markets
Consumer
markets can be segmented on the following characteristics of the customer.
Geographic
Demographic
Psychographic
Behavioralistic
Geographic
segmentation
Some
examples of geographic variables often used in segmentation.
Region:
by continent, country, State or area
Size
of the metropolitan area: segmented by size of population
Population
density: often classified as urban, suburban or rural
Climate:
according to the current weather conditions in certain geographical areas
Demographic
segmentation
Some
demographic segmentation variables include:
Age
Sex
Family size
Family life cycle
Generation: the baby boomers, generation X,
etc.
Income
Occupation
Education
Ethnicity
Nationality
Religion
Social class
Many
of these variables have standard categories for their values. For example,
family life cycle is often expressed as a bachelor, married without children
(DINKS: Double income, no kids), full nest, empty-nest or survivor solitaire.
Some of these categories have several stages, for example, nest full I, II or
III according to the age of the children.
Psychographic
segmentation
Psychographic
segmentation client groups according to their way of life. Activities,
interests and opinions (AIO) polls are a lifestyle tool. Some psychographic
variables include:
Activities
Interest
Opinions
Attitudes
Values
Behavioralistic
Segmentation
Behavioral
segmentation is based on the behavior of actual customers to products. Some
behavioralistic variables include:
The benefits sought
Utilization rate
Brand loyalty
User's status: potential, first time, regular,
etc.
Ready to buy
Times: holidays and events that stimulate
purchases
Behavioral
segmentation has the advantage to use variables that are closely related to the
product itself. It is a starting point direct enough for the segmentation of
the market.
Bases
for segmenting industrial markets
Unlike
consumers, industrial customers tend to be fewer and larger purchase
quantities. They evaluate offers more in detail, and the decision-making
process involves usually multiple personal
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