In every business organization, marketing forms a major platform of operations. It is on the basis of marketing that a business venture flourishes touching the heights of glory. Marketing involves an aggressive effort on the part of marketing professionals who are adept at promoting the product. A branded product sells off on the basis of its brand and does not often require a thrust to create a niche in the market. However there are certain steps that are required to be taken to create market segmentation for products that need to be promoted successfully.
Market segmentation is considered to be one of the major elements towards marketing products successfully, since it provides an ease in positioning of the product, targets a specific market and simplifies the entire planning process for the marketing of the product. In fact, the market segmentation encompasses segregating customers or even prospective customers in a market comprising of variety of groups where customers frequently share a common interest and having the same requirements that may be also be considered, to be a technique that aims at a specific group of customers.
Market segmentation goes in to the details of the specific requirements of the customer and where there is a diversity of requirements, there are segregated in groups. Market segmentation in its true form is required to meet certain criteria such as one segment is diverse from the other segment and another segment that comprises of similar requirements. Market segmentation paves a smooth path for freezing the specifications of the product, pricing, promotional and distribution tactics besides helping in the overall planning of the product and organizing the functioning of the management in a cost effective manner. One of the preliminary requirements is the thorough comprehension of the precise requirements of the customer. Market segmentation is usually referred to as an effective tool for resource allocation and definition of specific markets.
The segmentation of the market is usually segregated on zones or a location which is known as geographical segmentation; where it is based on gender, income, age and various other determining factors it is known as demographic segmentation. Psychological segmentation is done on the basis of tastes, preferences, likes, dislikes and lifestyles where behavioral segmentation is dependent on the responsiveness, loyalty and the history of the place.
It is imperative that prior to determining their own niche in the market, a business organization needs to perform an analysis on the various requirements of the segments of the market, their strengths and weaknesses, threats from competition, external opportunities along with other factors such as competitors strategy, economic atmosphere, eco-social factors and political and legal factors.
Market Segmentation is truly considered to be an effective tool that refers to buyers in a variety of segments having common requirements that would respond in a similar manner to a specific marketing effort and is a recognizable group of individuals, families, companies sharing similar requirements. Market segmentation usually responds in an anticipated manner to marketing or a promotional offer.
a) Helps in better understanding of the customers’ needs and wants. b) Better targeting and position of the product. c) Encourages two-way communication among the potential buyer and the organization. d) Maintaining effective relationship with the customers. e) Retaining the existing customers and attracting new ones. f) Improving service delivery standards. g) Reducing cost / expenses on various marketing activities and increases market share; resulting in higher profits.