Q. Explain market segmentation? Tell need to segment the markets?
OR
Clarify the term market segmentation & briefly explain the need to segment the market?
Ans.: Markets are not homogenous and they are made of various segments. A market is the aggregate of consumers of a given product & consumers vary in their characteristics parching behavior. It is possible to disaggregate the consumers into segments in such that in require characteristics and buying behavior; the members vary considerably among segments.
Segmentation profit the marketer as:-
- Facilitates Taping of the Market, Adopting the Offer to the Target: Segmentation also enables the marketer to crystallize the requirements of the target buyers. Also it helps him to produce an right predication of the likely responses from each segment of the target buyers.
- Facilitates Proper Choice of Target Market: Segmentation helps in distinguishing one customer group from another and there by unable him to choose which segment should form his target market.
- Makes the Marketing Effort More Efficient & Economic: Segmentation makes the marketing try more efficient and economic. It ensures that the marketing attempt is concentrated on well defined & carefully select segments. After all, the resources of any company are restricted & no company can normally afford to attack and tap the whole market.
For example: Ford Strategy - Through segmentation car manufacturers have achieved useful insights on the product features to be provided to different segments of car buyers.
Advantage the customer as well.
- Helps spots the less satisfied segments and succeed by satisfying such type of segments.
- Helps gain the specialization required in product, promotion, distribution & costing for matching the customer group & develop marketing offers.
Then, to compete more effectively, various companies go for target marketing which can establish and communicate the distinctive advantage of the company's market offering. This procedure is called as market segmentation.
For example.: GM has recognized 40 different customer requirement & 40 different market segments in which it would be present with its vehicle.