Market Segmentation is a core element for Business | Top MBA colleges in Bangalore

Posted by Dr. Rajasulochana On 07/03/2022 04:53:39

Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations. Top MBA college in Bangalore

  1. Geographic Segmentation: Geographic location is one of the simplest methods of segmenting the market. People living in one region of the country have purchasing and consuming habits that differ from those living in other regions. For example, lifestyle products sell very well in metro cities, e.g., Mumbai, Delhi, Kolkata and Chennai but do not sell in small towns. The banking needs of people in rural areas differ from those of urban areas. Even within a city, a bank branch located in the northern part of the city may attract more clients than a branch located in the eastern part of the city.
  2. Demographic Segmentation: Demographic segmentation divides the markets into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. Demographic factors are the most popular bases for segmenting the consumer group. One reason is that consumer needs, wants, and usage rates often vary closely with the demographic variables. Moreover, demographic factors are easier to measure than most other types of variables. ( Age, Gender, Income, Family cycle ) 

  3. Behavioural Segmentation:? In behavioural segmentation, buyers are divided into groups on the basis of their knowledge of, attitude towards, use of, or response to a product. Behavioural segmentation includes segmentation on the basis of occasions, user status, usage rate loyalty status, buyer-readiness stage and attitude.

 

PROCESS OF MARKET SEGMENTATION 

  1. Determine the need of the segment: The organization has to determine the customer needs based on a detailed analysis of existing products offered in the market based on which companies can understand the scope for developing their business idea 
  2. Identifying the segment: Once you know the need of the customers, you need to identify that “who” will be the customers to choose your product over other offerings. Quite simply, you have to decide which type of segmentation you are going to use in this case. Is it going to be geographic, demographic, psychographic? 
  3. Which segment is most attractive: The attractiveness of the firm also depends on the competition available in the segment. If the competition is too much in a given segment, then it does not make sense to take that segment into consideration. MBA in Bangalore

 BENEFITS/ ADVANTAGES / MERITS OF MARKET SEGMENTATION

  1. Determining market opportunities: Market segmentation enables the identification of market opportunities. The marketer can study the needs of each segment in the light of current offerings by the competitors. From such a study, the marketer can find out the current satisfaction of customers.
  2. Adjustments in marketing appeals: Sellers can make the best possible adjustments to their product and marketing appeals. Instead of one marketing programme aimed to draw in all potential buyers, sellers can create separate marketing programmes designed to satisfy the needs of different customers. Proper advertising and sales promotional appeals can be made depending on the target audience.
  3. Developing marketing programmes: Companies can develop marketing programmes and budgets based on a clearer idea of the response characteristics of specific market segments. They can budget funds to different segments depending on their buying response.

Conclusion: Market segmentation also allows businesses to manage their time and money, among other resources, in a better way. When organizations segment their consumers, they can identify which consumers are most likely to make a purchase and which are not. This allows marketers to focus marketing efforts on the most valuable customers, reducing the number of resources spent on marketing.

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