Identify and discuss different criteria of segmenting consumer markets. Using valid examples explain how different organizations may implement target market strategies
MARKET SEGMENTATION EXPLAINED
Market segmentation is a marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. (Definition of Market Segmentation). Below are some of the criteria can be used to identify different market segments:
i. There must be common needs within segment. ii. The market segment should be unique from other groups. iii. The market segment should have a similar response to market. iv. The market segments must be measurable in terms of both purchasing power and size.
v. Marketers must be able to effectively promote to and serve a market segment. vi. Market segments must be sufficiently large to be potentially profitable. vii. The number of segments must match the firm’s capabilities.
THE PURPOSE OF MARKET SEGMENTATION
Business enterprises produce for different buyers. The buyers in themselves are not similar but fulfil different criteria thereby belonging to different markets. Therefore market segmentation serves the following purposes taking into consideration the different needs for the different segments which are:
i. Leverage scarce resources.
This is especially beneficial for small companies as it allows target markets to be matched with the company’s abilities and competencies. In addition it enables the small company to create a guarded niche in the market
ii. To ensure that the elements of the marketing mix are designed to meet particular needs of different customer groups.
As a result a stronger competitive position is established through strategy and best practices. This is more pertinent in the internet age where the market is large and heterogeneous.
iii. Allows organisations to focus on specific customers needs, in the most efficient and
Market segmentation is a marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. (Definition of Market Segmentation). Below are some of the criteria can be used to identify different market segments:
i. There must be common needs within segment. ii. The market segment should be unique from other groups. iii. The market segment should have a similar response to market. iv. The market segments must be measurable in terms of both purchasing power and size.
v. Marketers must be able to effectively promote to and serve a market segment. vi. Market segments must be sufficiently large to be potentially profitable. vii. The number of segments must match the firm’s capabilities.
THE PURPOSE OF MARKET SEGMENTATION
Business enterprises produce for different buyers. The buyers in themselves are not similar but fulfil different criteria thereby belonging to different markets. Therefore market segmentation serves the following purposes taking into consideration the different needs for the different segments which are:
i. Leverage scarce resources.
This is especially beneficial for small companies as it allows target markets to be matched with the company’s abilities and competencies. In addition it enables the small company to create a guarded niche in the market
ii. To ensure that the elements of the marketing mix are designed to meet particular needs of different customer groups.
As a result a stronger competitive position is established through strategy and best practices. This is more pertinent in the internet age where the market is large and heterogeneous.
iii. Allows organisations to focus on specific customers needs, in the most efficient and
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