Market Segmentation: Concept, Importance, and Bases of Market Segmentation

Concept of Market Segmentation

 Companies cannot connect with all customers in large, broad, or diverse markets. But they can divide such markets into groups of consumers or segments with distinct needs and wants. A company then needs to identify which market segments it can serve effectively. This decision requires a keen understanding of consumer behavior and careful strategic thinking. To develop the best marketing plans, managers need to understand what makes each segment unique and different. Identifying and satisfying the right market segments is often the key to marketing success.

 

Importance of Market Segmentation

1. Advantage over competitors: With deep study of product, policies, strategies of competitors in different market segments, we can develop a product which is different from our competitors and satisfy the needs of consumers.

2. Opportunity to expand market: With market segmentation, marketer is able to create a new market opportunity within the existing one.

3. Discovery of marketing opportunity: Market segmentation provides the opportunity to create and study a deep segment from the existing target markets. With extensive research, marketers are able to create a different marketing strategy for different segment.

4. Awareness of  consumer needs: With market segmentation, the marketers are already aware of why the customer wants to purchase the product. All marketing activities are directed towards customer satisfaction. With the help of segmentation, it becomes easy to measure the level of segmentation of each segment and also to make improvement in the segmentation level.

 anager can easily get to know why customer do or do not buy certain products or services. All marketing activities are directed towards the customer s

5. Adjustments in products: Due to market segmentation, marketing manager can easily make adjustments in the product as per the needs of concerned segment.

6. Effective advertising: The advertising appeal is designed to create a positive impact in the buyer's mind. The message conveyed through advertisement influences the purchasing decisions of different buyer groups which are recognized with the help of market segmentation. 

 Bases of Market Segmentation

 A market segment consists of a group of customers who share a similar set of needs and wants. The marketer’s task is to identify the appropriate number and nature of market segments and decide which one(s) to target.

1. Geographic Segmentation: On the basis of region, area, state, environment etc. 

2. Demographic Segmentation: On the basis of age, gender, marital status etc.

3. Psychographical Segmentation: On the basis of needs, perception, prosperity, learning, attitude, lifestyle etc.

4. Behavioural Segmentation: On the basis of non-brand user, brand usage, shopping behaviour, name conscious, socializers etc.                                                                                                               

       

5. Socio-Cultural Segmentation: On the basis of culture, religion, race, language, education, economic class etc.                 

6. Use Related Segmentation: On the basis of usage rate, awareness, brand loyalty, adoption of innovative products, time etc.              

7. Benefits Related Segmentation: On the basis of price, utility, convenience and prestige etc.

the help of market segmentation, the marketing manager can easily get to know why customer do or do not buy certain products or services. All marketin

Helpful in Competition Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors in

Helpful in Competition Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors in

Helpful in Competition Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors in

Helpful in Competition Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors in

Helpful in Competition Market segmentation provides an opportunity of making deep study of the products, policies and strategies of competitors in