Tuesday 30 July 2013

What Is A Market Segmentation Strategy?

By Michael Obrien


The process of dividing market into groups is known as market segmentation strategy. This procedure is carried out due to variances in consumer needs and wants. The needs and wants are derived from the service product. The division can be based on basis of economic wealth, culture and also individual character. In other academic publications, the idea is referred to the process of separations.

The division and subdivision entails identifiable segments with similar needs, demand traits and wants. Market segmentation strategy is one of the fundamental concepts in marketing. It is important because it helps to achieve the following purpose: It helps a company to achieve competitive advantage.

The business is also in a good position to generate marketing procedures for each division. It therefore makes the management to make decision on the target segment as well as particular segments.

This therefore makes the firms to determine target segments of demand as well as targeting specific segments.

Exploration, control, implementation and consumer oriented planning are some of the important approach that the management should strive to achieve. Market separation enables accompany to manufacture a product that aims at achieving competitive advantage.

An ideal market segment must meet some criteria. These are: the ability of measurement, its stability, ability to generate revenues, possibility of reaching possible patrons through advertisements and allocation control.

Being able to understand the requirements of the consumers and finding the strategies of meting them are some of the significant recognitions. They are significant because they aim at creating a stiff competition through the production of brands.

Through an extensive research, it is possible to achieve it. Since it is not possible to satisfy all individual need, a clearly defined promotion strategy may help create an economic sense. This concept therefore falls under the cover, except understanding the diversity of customers.

The concept may also be used in introducing a deep knowledge of various market divisions in alternative ways. In any business, the division can be based on some criteria. The one used for the segmentation are: behavioral and geographical differences as well as demographic differences. Dividing the customers into various ecological locations is concerned with the geographical differences.

With the divisions, they all play a role in introducing some methods. For instance selling materials for summer wear would not work in winter regions. A demographic division on the other hand is concerned with the wide study of possible clients. Therefore when marketing a product or a service, many variables like education, income, family size, age, gender, occupation, culture and religion should be taken in account.

A population difference is important to determine as to whether a product is manufactured for an individual customer or not. A behavioral difference on the other hand is all about the customer needs. This creates other reactions to the needs through the purchase of these products and services.

A behavioral difference is carried out through a study based on some variable such as loyalty to some brand as well as the expenditure. As a core concept in management, market segmentation strategy should be given a priority.




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