Market Segmentation and diversity are complementary concepts. Without a diverse marketplace, composed of many different peoples with different backgrounds, cultures,environments,paradigms, thoughts processes, interests, needs and wants, there really would be little reason to segment markets.
Earlier Mass Marketing – selling the same product or service package to everyone, was the most widely used marketing strategy, before the widespread adoption of the marketing concept. In many countries this is still developing and yet to become the part of the marketing and management DNA.
Market Segmentation is to be followed as a logical way to meet customers needs. Market Segmentation is defined as the process of dividing a potential market into distinct subsets of consumers with a common need or characteristic and selecting one or more segments to target with a specially designed marketing mix or product, price, promotion, place etc.,
Besides supporting in the development of new products, Market Segmentation research also supports in the redesigning and repositioning of existing products and services and in the creation of the appropriate promotional materials, including the selection of the most effective media for promotion.
Market Segmentation Strategies benefit both the customers and the marketers, hence they received full support from both parties. Market Segmentation is now widely used by most of the organizations including manufacturers, retailers, channels and even the not for profit sector.
9 Major Classes of Consumer Characteristics serve as the most common basis for Market Segmentation. These include:
- Geographic Factors
- Demographic Factors
- Psychological Factors
- Pyschographic Factors
- Socio-Cultural Factors
- Use -related Factors (Application)
- Use – Situation Factors (Environment)
- Benefits Expected and
- Hybrid Forms of Segmentation like Psychographic-demographic profiles or geodemographic factors.
Key Criteria for Market Segmentation include:
Once one identifies potential target markets, one must decide whether to target 1 segment i.e concentrated marketing OR to target several market segments i.e. differentiated marketing.
One has to then develop a positioning strategy for each of the selected target segment.
In some cases, one can recombine 2 or more market segments into one larger segments.
How do you Market Segmentation in your company?
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