Market Segmentation:
It is the Process of dividing the total market of Goods or Services into several smaller Groups, sharing several Demand-Factors.
Benefits of Segmentation :
1) Consistent with Marketing Concepts :
Identify wants within the Segment & the Prepare the Marketing-Mix to Satisfy the Customers.
2) Efficient Use of The Limited Resources :
Small Firms can handle one or two Segments, but may Fail in very large Segments.
3) Advertising :
It can be very Effective within the limited budget, & gives in return, Better Results.
4) Firms Growth :
Most of the Firms Grow Rapidly, by Establishing a Strong Position in its Particular Segment.
Segmentation Process :
1) By Intuition (a Gut Feel) :
This Segment of People Strongly Rely on their Judgement, having a Strong Belief in their Experience.
2) Follow The Leaders or The Existing Players:
This Segment of People are the Complete Followers of the Existing Winning Players & they have a Strong Believe in them.
3) By Research :
These are the Most-Organised People in this Segment, where they Collect Data, Calculate, Evaluate, go for Comparison & take steps in a most Careful way.
Steps in Segmentation Through Research:
1) Identify Current / Potential Wants :
Ø Needs Currently Satisfied,
Ø Needs Not Currently Satisfied,
Ø Future-Needs Not yet Recognised.
2) Identify Distinguishing Characteristics of Segments :
3) Determine Who Has Each Wants:
Estimate Demand For Each Segment to Determine Viability.
Basis For Segmentation :
1) Measurable & Obtainable Data.
2) Accessible,
3) Large Enough.
Category of Market :
1) Consumer Market : Where Consumers buy for Personal, Family or Friends use,
2) Industrial Market : Where Industrial Buyers Buy for Commercial/Business use.
Thus the Marketing Mix will differ depending on whether it is aimed at Consumer or Industrial Buyers.
