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.
