1 - Market Segmentation

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Market Segmentation

Presented By :

Gokul,Varsha,Atiroopa,Harsh,Deepak,Abay,Somaand Nupur


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Introduction

In today's world of globalization , market has become a very important

medium for running and maintaining business at national and

international level.

A market is basically a place where business persons exchange goods and

capital or some other goods.

Basically concept of market segment originates from marketing and

economics . Segment means a part or piece , similarly a market segment is

a markets part or we can say a sub set. This sub set comprises of those

entities or people who have demands for common product or services and

these demands are based on function or price. So now ,market segment

Definition can be stated as a significant group of people , business ,

families , entities or organizations that have demands for common goods

or services.


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Understanding Meaning of Market Segmentation

Market segmentation means dividing the total

market for a product into different parts i.e

segments on certain bases and using eachsegment fully for the purpose of marketing and

sales promotion.

Due to segmentation, each segment will have

uniform features and suitable marketing mix

can be introduced for promoting sales in each

segment.


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Market refers to the aggregate of all demandfor a particular product/service. It also refers

to the aft customers (existing and potential)for the product/service. All are consumers butthey differ as regards their:

Basic features,

Needs and wants,

Financial position i.e purchasing power,

Willingness to buy,

Likes and dislikes and

Social and cultural background


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For effective marketing, the total market

needs to be divided into suitable segments

and exploited fully through suitable marketing

mix. This is exactly what is done in

segmentation.

One marketing mix for all segments will not be

effective and for introducing differentmarketing mixes, segmentation is a basic

requirement.
http://kalyan-city.blogspot.com/2010/05/marketing-marketing-mix-4-ps-of.htmlhttp://kalyan-city.blogspot.com/2010/05/marketing-marketing-mix-4-ps-of.html


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Philip Kotler has rightly pointed out that

"Markets consist of buyers and buyers differ in

one or more respects. They may differ in their

wants, resources, geographical locations,

buying attitudes and buying practices. Any of

these variables can be used to segment a

market.


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Market segmentation means dividing the total marketinto different sub-markets that have similarcharacteristics with reference to consumers.

The individual buyers within each segment are similar

in terms of their wants, expectations and buying powerand marketing programme to enhance consumersatisfaction and sales promotion. This approach ofmarket segmentation is better as compared to theapproach of treating the entire market for a product as

one entity and use only one marketing mix for themarket (market aggregation / mass marketingapproach).


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Market segmentation is a new customer-orientedphilosophy and is consistent with modern marketingconcept. It studies needs and expectations of differentconsumer groups and provides something for

everybody. This promotes sales and also offers moresatisfaction to buyers of that group. Here, the produceremploys a 'Rifle Approach' and not the 'ShotgunApproach'. This means he pinpoints the target(customers group) and draws specific plan to meet

their needs rather than fixing broad target (allcustomers) and preparing one general plan to meet theneeds of all customers.


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It is an accepted fact that markets are nothomogeneous. Consumers differ in their needsand also the manner in which the needs are to be

satisfied. For example, clothing is required by allconsumers but all consumers do not wear thesame type of clothing. The same is the case withshoes, shampoo, soap, cosmetics and so on.

Naturally, manufacturers of each products haveto produce different varieties as per therequirements of customers of different segments.

f f k


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Definitions of Market Segmentation

(MS)

According to Philip Kotler, market segmentation

means "the act of dividing a market into distinct

groups of buyers who might require separate

products and/or marketing mixes." According to William J. Stanton, "Market

segmentation in the process of dividing the total

heterogeneous market for a good or service intoseveral segments. Each of which tends to be

homogeneous in all significant aspects


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Requirements of market segmentation

Identifiable: the differentiating attributes of thesegments must be measurable so that they can beidentified.

Accessible : the segments must be reachable through

communication and distribution channels. Substantial: the segments should be sufficiently large

to justify the resources required to target them

Unique Needs: to justify separate offerings, the

segments must respond differently to the differentmarketing mixes.

Durable :the segments should be relatively stable tominimize the cost of frequent changes.


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Objective of market segment

To prepare proper marketing program.

To find out new markets

To study purchase potentiality To make market customer oriented

phphilosophy

To create for distinctive buyer a separatemarket


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Impotance Of Market Segmentation

Helps Stock Finance- its helps in formulating policiesstrategy , techniques and program for different market.

Optimizes and utilizes the companies little resourcesthrough use of particular effective marketing strategy

Consumer oriented

Avoid unnecessary wage status

Marketing opportunity can be developed

Enhances marketing efficiency Products are available with the consumer easily


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Advantages / Significance of MS

Facilitates consumer-oriented marketing:

Market segmentation facilitates formation of

marketing-mix which is more specific and

useful for achieving marketing objectives.Segment-wise approach is better and effective

as compared to integrated approach for the

whole market.


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Facilitates introduction of suitable marketing

mix:Market segmentation enables a producer to

understand the needs of consumers, their

behaviour and expectations as information iscollected segment-wise in an accurate

manner. Such information is purposefully

usable. Decisions regarding Four Ps based on

such information are always effective and

beneficial to consumers and the producers.


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Facilitates introduction of effective product strategy:

Due to market segmentation, product development is

compatible with consumer needs as there is effective

crystallisation of the specific needs of the buyers in the targetmarket. Market segmentation facilitates the matching of

products with consumer needs. This gives satisfaction to

consumers and higher sales and profit to the marketing firm.

Facilitates the selection of promising markets: Marketsegmentation facilitates the identification of those sub-

markets which can be served best with limited resources by

the firm. A firm can concentrate efforts on most productive/

profitable segments of the total market due to segmentation

technique. Thus market segmentation facilitates the selection

of the most suitable market.


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Facilitates exploitation of better marketing opportunities: Marketsegmentation helps to identify promising market opportunities. Ithelps the marketing man to distinguish one customer group fromanother within a given market. This enables him to decide his targetmarket. It also enables the marketer to utilise the available marketing

resources effectively as the exact target group is identified at theinitial stage only.

Facilitates selection of proper marketing programme- Marketsegmentation helps the marketing man to develop his marketing mixprogramme on a reliable base as adequate information about theneeds of consumers in the target market is available. The buyers areintroduced to marketing programme which is as per their needs andexpectations.

Provides proper direction to marketing efforts: Market segmentationis rightly described as the strategy of "dividing the markets in order toconquer them". Due to segmentation, a firm can avoid the markets

which are unprofitable and irrelevant for its marketing purpose andconcentrate on certain promising segments only. Thus due to marketsegmentation, marketing efforts are given one clear direction forachieving marketing objectives.


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Facilitates effective advertising: Advertising mediacan be more effectively used because only themedia that reach the segments can be employed. It

makes advertising result oriented.

Provides special benefits to small firms: Marketsegmentation offers special benefits to small firms.

The resources available with them are limited asthey are comparatively new in the market. Suchfirms can select only suitable market segment andconcentrate all efforts within that segment only for

better marketing performance. Such firms cancompete even with large firms by offering personalservices to customers within the segment selected.


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Facilitates optimum use of resources: Marketsegmentation facilitates efficient use ofavailable resources. It enables a marketing firm

to use its marketing resources in the mostefficient manner in the selected target market.The marketing firm selects the most promising

market segment and concentrates all attentionon that segment only. This offers best results tothe firm in terms of sale, profit and consumersupport as compared to the results available

from spending such resources on the totalmarket.


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In conclusion, it can be said that market

segmentation offers benefits not only to

marketing firms but also to customers. The

marketing job will be conducted efficientlyand the available resources will be utilised in a

better mariner. These advantages also suggest

the importance of market segmentation andmake a case in its favour.

M k t S t ti I P t


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Market Segmentation In Present

Marketing System

In the present marketing system, market segmentation is anormal rule and not an exception. It enables companies toexploit marketing opportunities fully by using the availableresources and also enables them to face marketcompetition with confidence. It enhances marketing

efficiency of the firm in each segment selected. Nosegmentation means absence of market penetration. Inshort, market segmentation is an important aspect ofmodem marketing management. It is a must for survivaland growth in the present competitive marketing. It

facilitates the preparation of separate marketingprogrammes for meeting the needs of different groups ofbuyers. Right markets for the right products can beprovided through market segmentation.


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In brief, market segmentation is important not onlyfor creating consumers but also for satisfyingthem. Market segmentation helps matching of

market opportunities to the resources of thecorporations and enables them to face marketcompetition effectively. It raises marketingefficiency through proper adjustment of marketing

mix for each market segment. Marketsegmentation is one important element of modemmarketing management. Segmentation givesprecise answer to the question, "To whom shouldwe sell out products and what should we sell tothem?

Documents

1 - Market Segmentation