Market segmentation Essay
Market segmentation is simply a modern marketing strategy in which the market for your customers are divided in various several groups and segments based on some major key factors such as demographic, geographic, psychological and behavioural factors. By dividing the market, the sellers that that try to deliver good value to their customers will be able to have better understanding of their target audience and thereby make their marketing more effective. Market segmentation also helps to make the three areas of marketing which are, mass marketing, product differentiated marketing and target marketing. Market segmentation helps all these marketing types to customize their markets. Marketing segmentation cannot be complete without considering the following variables that assist it in segmenting its consumer market.
The demographic segmentation divides customers into segments based on demographic values such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, social class and nationality. It is often used for reason that the variables are easy to identify and measure.
Age and life cycle segmentation
The consumer’s needs and wants change with age. Therefore some companies uses age and life cycle segmentation, where age and the life cycle determine the marketing approach.
Gender segmentation is used to differentiate the needs and wants between men and women due to the fact that men and women have different attitudes towards a product. The gender segmentation are applied clothing, hairstyling, and cosmetics.
Income segmentation divides the market into different income groups. It is used in automobiles, clothing, cosmetics, financial services and travel.
Each generation is influenced by times in which they grow, marketers market to a generation by using icons and images that is relatable according to the generation
Social class segmentation
This type divides the customers according to their preference in cars, clothing, home furnishing, leisure. Although taste changes but many company design products for specific social classes.
It divides customers into segments based on geographical areas such as nation, states, regions, countries.
This is derived from two principal types of customers: personality profiles and lifestyle profiles.
It is based on customer’s attitude toward, use of, or response to a product and they are divided further into various variables like occasion, benefits, user status, usage rate, buyer-readiness stage, loyalty status and attitude.
2) ADVANTAGES OF ADOPTING MARKET SEGMENTATION
The use of market segmentation and why it will perform better than a business that does not adopt it are listed as follows: It will help a firm to be able to separate its customers and be able to reach profitable customers in supplying value and better customer’s relationship which in return will bring profitable value back to the firm. It will be able to help a firm to be knowledgeable on the type of product and market needed to produce for its customers. It will enhance the market structure of a firm in helping it locate new market and new profitable product for its firm. Smart enterprises use segmentation to continually monitor, quantify, and qualify the changing customers, in part to stay ahead of the competition. Segmentation data provides organizations with information to develop timely goods and services that profitably serve customers.