MARKET SEGMENTATION

Market Segmentation and Product Positioning

Market Segmentation and Product Positioning

Introduction

Market segmentation is the process of grouping a market into smaller subgroups. This is not something that is arbitrarily imposed on society: it is derived from the recognition that the total market is often made up of submarkets (called segments). These segments are homogeneous within (i.e. people in the segment are similar to each other in their attitudes about certain variables). Because of this intra-group similarity, they are likely to respond somewhat similarly to a given marketing strategy. That is, they are likely to have similar feelings about a marketing mix comprised of a given product, sold at a given price, distributed in a certain way, and promoted in a certain way.

Through the process of market segmentation, there are certain variables to identify customer groups, such as needs, income geographical, location, buying habits and other characteristics as well, we can focus on the parts of the market that it can serve best and make great profit.

The identification of individuals with similar needs and requirements (homogeneous) will have significant implications for the determination of marketing strategy (Jobber 2001). Marketers can achieve this identification by categorizing these individuals into market segments and deciding of which segment(s) to target (Kotler 2003).

The aim of segmentation is to arrive at clusters of like-minded companies so as to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. There is a very strong pressure to use segmentation to win a competitive advantage as there is often little to differentiate one product from another. Segmentation therefore links strongly with a strategy to achieve a sustainable differentiated position.

Importance of Market Segmentation

Due to the fact that resources are limited. Therefore, all business will minimize their resources and maximize their profit to gain their benefit. In order not to waste any times and money on promoting their production in the wrong direction. Market segmentation is needed to spot their product's market opportunities, gain competitive advantage and target marketing activity on promotion.

Market Targeting

Target marketing tailors a marketing mix for one or more segments identified by market segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market.

Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firm's objectives, resources, and capabilities.

The process ...