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What is Market Segmentation?
The concept of Market Segmentation refers to the process of dividing the clientele of an organization into different groups which can be targeted by the organization while implementing its various marketing techniques. This process of dividing the clientele into homogenous groups to be targeted is called Market Segmentation. The whole objective of the process of Market Segmentation is to divide the clients, existing and potential into groups based on the similarity of their needs and buying behavior so that the organization can focus upon providing relevant products and services for their satisfaction and also implement their various marketing and other practices efficiently, as directed toward such targeted groups.
Features of Marketing Segmentation
There are a number of different features of market segmentation such as –
- Market Segmentation can be assessable because it can significantly help in recognizing the number of potential customer base in the market that the organizations can target.
- The segmentation of the market should also be made accessible for the various people through efficient communication channels such as the sales force distributors, internet, etc.
- Market segmentation should be such that can be relied upon for a longer period of time and does not change very quickly.
- It is also essential that the market segmentation is substantial.
Why should the customers in a market be categorized into segments?
There are also a number of reasons why a market should be categorized into segments, such as –
- Segmentation helps in the understanding of the various needs and preferences of the consumers
- It helps in allowing an organization to be able to design proper strategies, based on the findings of the segmentation process.
- It helps an organization to be able to create and provide new products to the consumers in the market, based on their preferences and needs
- It helps organizations in avoiding spending into markets that may not be fruitful
- Product development and innovation becomes easier through segmentation
Methods of Market Segmentation
There are different methods using which an organization can segment the market such as –
- Geographic – this methods allows segmentation on the basis of factors such as location, region, development rate, etc. of the geographic boundaries that the consumers live in.
- Psychographic – the psychographic segmentation methods allow the segmentation based upon the lifestyle, preferences, attitudes, opinions, values, social status, etc. of the consumers in the market.
- Business Market – this method allows segmentation based on several variables such as the size of the business, buy approach, targeted product usage, etc.
- Behavioral – this method allows segmentation on the basis of behavioral traits of the consumers such as their attitudes, their choices and preferences, their knowledge, response to the products, usage of products, etc.
- Demographic – this method allows segmentation based on the factors such as location, income group, gender, age, religions, social class, nationality, race, ethnicity, etc.
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