Segmentation is dividing a market into a smaller groups that shared similar needs, wants, characteristics, and behaviours towards the goods and services. (reference). The market segmentation is a must and important to the all oraganizations. This is because each customers have different needs and wants, so that by segment the market, the organization can identify which customers that can match with their products and services. In Dell, the segmentation is a backbone for them.
There are two segmentation criteria in Dell; segmenting consumer market and segmenting business market. In the segmenting consumer markets, there are geographic, demographic, socio-economic, behaviour and psychographic segmentation. In Dell, the purpose to segment the consumer markets is focus to the personal users or for home users. The geographic segmentation refer to divide a market into a different geographical units such as nations, states, regions, countries, cities or neighbourhoods. (reference).
In Dell, they segment the market to all nations. This is because Dell is spealize in online purchasing. However, Dell more focus on segment the developed and developing countries because percentage of consumer that used technology from developed and developing countries are high. In other hand, the demographic segmentation is dividing a market into a group based on age, gender, education etc. Consumer needs and wants change with age. (reference). In Dell, there are many different types of consumers; generation x, generation y and baby boomers.
For example, consumers from generation y might need a lot of new applications or software in their computers. Then, in Dell, the socio-economic segmentation is based on consumer’s income. Based on their income, Dell can easliy identify and divide them into a similar group that share same range of income. Next, behavior segmentation is dividing a market based on consumer knowledge, attitude, use or response to a product. (reference). The benefits sought and loyalty status are been segmenting in Dell. Each buyers have different benefits that they seek from the product and service.
For example, in Dell a group of consumers will be divide into a group that people look for in the product class, the kinds of people who look for each benefits or features. In addition, market can also be segmented by consumer loyalty. Some consumers are very loyal to Dell’s products and they one brand all the time. For example for Home User, the buyers will purchase a laptops and computers. This kind of customers are very useful to the organzation because they have a possibility to repeating buy the products and services.
In the segmenting business markets is more to segment the business purpose. Dell has segment the business markets same as segmenting the consumer markets. But somehow there are slightly different by segmenting the demographic segmentation. In this business markets segmentation, Dell has divide the segment by which industries that buy their products; for examples, small and meduim businesses, large enterprise and public sectors. Then Dell will segment the company size and lastly the geographical areas that Dell focus on. Next, Dell has segment the operating variable; the customer capabilities.
The customer capabilities means that the services that customers need from Dell. In Dell, there are free delivery services, home service and after sale service. Dell has segment this by which customer need a many services and the customer need a few services. Dell also has segment their customers based on purchasing approaches. Dell should be able to understand the nature of existing relationship of their customers. Dell also has segment their business markets into a purchasing criteria. Means, Dell divide the market into the companies that seek a quality, service or price.
In the segmenting business markets, Dell also has segment the market by the situational factors; specific application and size of order. In the specific application, Dell can focus on certain applicatios of our product rather than all applications. In size of order, Dell is focus on the segmeting the large and small orders. There are the techniques to segment the markets. By using this techniques, Dell can easily target and positioning the markets. The techniques must be measurability means the size, purchasung power and characteristics of the segment can easily be measured.
The segmentation process also must be accessibility so that the segment espeacially towards the individual customers that can be reach and served effectively. Futhermore, the segmentation methods also must be differentiable because the segment are conceptually distinguishable and repond to different marketing stimuli. Last but not least, the segmentation can be actionable so that the effective programs can formulated for attracting and serving the segment. By develop the customer profile, Dell can stored and used the information of their customers whenever they want.
Dell can have information that regarding to the customers. Dell can list their customer profile by name, age, gender, address, occupations, income, credit card details, new or current customer, what they purchase from Dell and others that relating to the customer profile. By doing this customer profile, Dell can always keep in touch with their customers and also can build relationship with the existing customers. By doing this startegy, Dell can make customers continue buying from them and can create customer loyalty.