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NATURE OF MARKET SEGMENTATION?



Meaning: -Market segmentation refers to subdividing a larger market into smaller submarkets.
Definition: -“Market segmentation is the process of dividing the total, heterogeneous market for a product into several sub markets or segments, each of which tends to be homogeneous in all significant aspects.” Defined by ……….. (William Stanton)
The nature of market segmentation is stated as follows: -
1.       Processes: - Segmenting the market is a systematic process, which consists of the following steps;
·         Define relevant market.
·         Identify the bases of segmentation.
·         Define the market segments.
·         Evaluate market segments
·         Select the relevant market segment(s)

2.       Primary Activity of marketing: - Marketing segmentation is the primary activity of a marketer. Market segmentation is undertaken before designing marketing-mix. After selecting the appropriate market segment, the company develops the marketing-mix for the selected segment.

3.       Brings Several Benefits: - Market segmentation brings benefits to the marketer. The benefits include;
·         Helps to design the product.
·         Facilitates right pricing strategy.
·         Enables effective promotion.
·         Facilitates proper distribution, etc.

4.       Subject to Certain Limitations: - Market segmentation is subject to certain limitations:
·         It is difficult to predict consumer behavior.
·         It is difficult to collect accurate data from consumers.
·         It is based on certain assumption.
·         It is time consuming process.

5.       Competitive Advantage: - Due to market segmentation, the company can design the products properly. Also, the company would be in a position to design effective pricing, promotion and distribution strategies. The sound marketing

6.       Customer Satisfaction: -

7.       Corporate Image: -

8.       Essentials of Segmentation: -
·         Heterogeneous customers.
·         Easy availability of consumer data.
·         Adequate resources to serve the segmented markets.
·         Positive response from segmented markets.

9.       Elements of Marketing Strategy: -
·         The starting point of developing marketing strategy is to segment the markets depending upon various factors such as demographic like age, gender, education, etc.
·         Proper segmentation helps to target the markets properly.
·         Positioning the product to create a distinct brand image.

·         Blending of marketing mix completes the marketing strategy.