What is market segmentation?
Identify the bases of market segmentation.
What are the requirements of effective segmentation?
Explain the different levels of market segmentation.
Answer: Market segmentation is the process of dividing the market into different parts on the basis of various features of market. The purpose of market segmentation is to provide maximum satisfaction to the target markets. Market segmentation is the process of dividing a t total market into groups of consumers who have relatively similar product need. According to Philip Kotler “Dividing the market into distinct groups with distinct needs, characteristics, or behavior who might require separate product or marketing mixes”.
From the above discussion we can say that;
- Market segmentation is some parts of total market.
- Homogenizes customers are included within same class.
- Different marketing mixes are adopted for each market segment.
- Its ultimate objective is to provide better satisfaction to customers.
Identify the bases of market segmentation.
Answer: Market segmentation is the process of dividing the market into different parts on the basis of various features of market. Segmentation base is a characteristic of individuals, groups or organizations that marketing managers use to divide a total market into groups. There is no perfect procedure of market segmentation. The bases of consumer market segmentation are given below:
1. Demographic Segmentation: Dividing the market into groups based on variables such as age, gender, family size, education, religion, race, generation, and nationality. The bases of demographic segmentation are;
- Age (6-12, 20-30, 35-50, 65+)
- Gender (Male and Female)
- Family size ( Based on family members; 1-2, 3-4, 5+)
- Family life cycle (Youth, married, old aged).
- Income (5000-10000, 15000-20000, 30000-50000, 50000+)
- Occupation: (Farmer, Teacher, Doctor, Engineer, Lawyer, etc)
- Religion (Muslim, Hindu, Kristen, Buddha etc.).
- Nationality (Bangali, British, American, etc.)
2. Geographic Segmentation: Dividing the market into different geographical units such as nations, states, regions, countries, or neighborhoods. The bases of geographic segmentation are;
- World region or country (Asia, Africa, North America, etc.)
- Country region (South Atlantic Region, Pacific region, etc.)
- City or metro size (Below 50000, 50000-100000, 100000-250000, 300000+)
- Climate (Winter based or Summer based region)
3. Psycho-graphic Segmentation: Dividing the market into different groups based on social class, lifestyle, or personality characteristics. People in the same demographic group can have very different psychographic makeup. The bases of psycho-graphic are;
- Social class (Upper class, Middle class, Lower class)
- Life style (Ambitious, Energetic, Brave)
- Personality (Freedom minded, Reserved, Leadership)
4. Behavioral Segmentation: Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase or use the purchased item. Many marketers believe that behavior variables are the best starting point for building market segmentation. The bases of behavioral segmentation;
- Occasion
- Benefits
- User status
- Usage rate
- Readiness
- Attitude toward product
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What are the requirements Of effective segmentation?
Answer: There are various types of techniques of market segmentation. But all techniques are not effective equally. So, market segmentation should be on basis of some requirements. These requirements are given below:
- Measurability: Measurability is the degree to which the size and purchasing power of market segments can be assessed.
- Substantiation: It is the degree to which target segments are large enough and have sufficient sales and profit potential to warrant seaport marketing programs.
- Accessibility: Accessibility is the degree to which firm can reach intended target segment efficiently with its products and communications.
- Differentiation: Differential responsiveness is the degree to which market segments exhibit varying responses to different marketing mix combinations.
- Actionable: Effective programs can be designed for attracting and serving the segments.
From the above discussion we can say that; market must be segmented on the basis of mentioned conditions for the purpose of providing better satisfaction of customers.
Explain the different levels of market segmentation.
Answer: Market segmentation is the process of dividing the market into different parts on the basis of various features of market. The various levels of market segmentation are discussed below:
1. Mass Marketing: Mass marketing is the practice of covering an entire market with one marketing mix. Mass marketing strategy neglect market segmentation policy and marketer covers the whole market with one marketing strategy.
2. Segment Marketing: Segment marketing is isolating broad segments that make up a market and adapting the marketing to match the needs of one or more segments. Segment marketing divide the total market into different parts and operate marketing programs with different marketing strategies.
3. Niche Marketing: Niche marketing is focusing on sub segments or niches with distinctive traits that may seek a special combination of benefits. Niche marketing is applied on specific market segmentation. Generally less capital entrepreneurs choose niche market segmentation.
4. Macro Marketing: It is the practice of tailoring products, and marketing programs to suit the tastes of specific individuals and locations. There are two types of micro marketing. These are;
- Local marketing: Local marketing involves tailoring neighborhoods, and ever specific stores. Local marketing always give importance on local products.
- Individual Marketing: Individual marketing is tailoring products and marketing programs to the needs and preferences of individual customers. Individual marketing programs formulate on the basis of individuals needs and wants. Such as; Tailoring, Order based furniture, etc.
