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Market Segmentation - Essay Example

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Market Segmentation

The needs of these different types of consumers may vary due to a variety of factors. The concept of market segmentation therefore refers to the process of targeting different types of consumers with different marketing programmes and products, suitable to their needs (Croft, pp. 1). Market segmentation appears to be a simple theory; however, it remains one of the most widely researched marketing topics (Wedel & Kamakura, pp. xix). The topic of market segmentation has been around in the world for nearly a decade. It has gained large importance these days, especially in the industrialized world. The needs of consumers are widely heterogenic; therefore, different products are made that target specific needs of consumers (Wedel & Kamakura, pp. 3). The theory of market segmentation, given by Smith (1956) has maintained its value, for he recognized the heterogeneity of the needs of the consumers, because of their differing preferences. The purpose of market segmentation covers maximizing sales and profits. In the modern world of today, the theory of market segmentation has undergone various changes and has gotten more complex. The paper attempts to explain the process of market segmentation. It also describes the reason for carrying out market segmentation. Furthermore, it talks about the concept of ‘targeting’, which remains extremely important in the theory of market segmentation. ...
Consumer groups are divided according to their similar requirements and buying characteristics. The process of market segmentation begins this way. The factors that determine these segments include ‘geographic, demographic, psychographic, and behavioral’ factors (Kotler, pp. 44). The process of establishing segments consists of lengthy surveys and heavy paperwork. The second step involves market mapping. Market mapping consists of establishing different types of costs such as logistics cost, retail and selling costs. The third step involves the consumers. The suggestions of the consumer are largely viewed and implemented in many cases. The fourth step involves the creation of segments. Consumers with a similar mindset and economic situations are placed in one group (Buzzle, n.p). After the creation of different segments within a market, the organization can target these segments for its sales and marketing programmes. The particular marketing programmes also take in to account the different competing organizations that target the same segment (Dibb & Simkin, pp.10). Marketing involves catering to the needs of different consumers and satisfying different user needs. One homogenous product for all means that the consumer satisfaction is not guaranteed. Therefore, a perfect market involves wastage of resources. Therefore, it remains extremely necessary for a firm to target specific segments of the market. This ensures that the needs of the consumers are wholly satisfied. Market Segmentation particularly works in firms of imperfect competition. Another reason for deeming market segmentation important and necessary involves giving the organization a competitive edge. Market segmentation ensures that the company builds on its competitive edge and specialist ...Show more

Summary

The market consists of different types of consumes that have a variety of needs and various types of products (Kotler, pp.44). The market further divides itself into different types of consumers, further divided into subgroups and segments. …
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Market Segmentation essay example
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