MARKET SEGMENTATION

Market Segmentation and Product Positioning

Introduction

A market is made ??up of individuals and organizations that are in need, and they have money to spend for their wanted desire. However, in most of the markets needs and desires of the buyers are not same they vary from person to person.

A company must deepen the knowledge about the market in order to adapt its offering and its strategy of marketing to the requirements of individuals and groups collectively. How can the company accommodate in such diversity? The segmentation is considered as a starting point after recognition that the market is heterogeneous, and is needed to be divided into groups or homogeneous segments. This can be chosen as a target market for the company. Thus, segmentation involves a process of differentiation within a market needs.

The identification and selection of market segments raises the problem of deciding the position that is wanted by the company to occupy its target markets, i.e. choosing a suitable position for the launch of products. One of the key factors responsible for the success of products in competitive markets is proper positioning. In a way one might speak of the position as the procedure in which we will introduce our product or service and how we intend to be perceived by our target market (Frank, Massy, Wind, 1972).

Market Segmentation

What is market segmentation?

The market segmentation is a process that involves the division of the total market in several smaller internally homogeneous groups that are to be targeted by the organization. The essence of segmentation is to attract the consumers that are aware about the product or service. One of the key elements of a successful company is its ability to target properly in the potential market. Segmentation is also an effort to improve the accuracy of marketing in a business. It is a process of aggregation pertaining to the group in a niche market and related to the people with similar needs.

The market segment is a group of relatively large and homogeneous consumers that can be identified within a market; these are the individuals that have desires to purchase. The target markets are selected according to the geographic location, consumer attitudes, purchase behavior or similar buying habits. This procedure is somewhat similar to the marketing mix (Smith, 1956).

The behavior of consumers is often too complex to explain in one or two characteristics that should be taken into account. There are several dimensions starting from the needs of consumers that are to be explored by the organizations. It is therefore advisable to present flexible market offerings in order to successfully attract desired market segment. Flexible supply and demand is a solution consisting of product and service elements that are valued by all segment members and options that are valued by few. A good segmentation should result in construction of different subgroups or market segments with the following characteristics:

Intrinsically homogeneous (similar) consumer segment should be as close as possible. This would be favorable for the organization based ...