The paper “ Market Segmentation as an Effective Marketing Strategy That Has Proven to Rake in Profits for Companies That Carefully Implement It” is a thrilling variant of an essay on marketing. Market segmentation is taken to be a marketing and economic concept that is characterized by a set of the market made up of different people who have certain characteristics that make them demand similar services and/or products (Weinstein 2004). In simpler terms, market segmentation may be defined as the process of dividing an entire market into groups of markets that are made up of people who have similar needs for products or services (Dibb 1996).
Market segmentation is a strategy whose beginnings date back to 1956 when it was first introduced theoretically by Smith. Its history, therefore, lies with industrial development that saw various economic sectors formulate mass production and marketing strategies (Mazanec 2000). This meant that businesses began to recognize and take into consideration the uniqueness and heterogeneity of consumers' needs. In industrial countries, market segmentation has become one of the most important marketing elements. Ever since it was introduced by Smith (1956), the concept has been used both theoretically and practically in marketing.
The history of market segmentation can, therefore, be well explained using industrial development. With industrial development, the processes of production became more flexible (Gitman 2009). Firms began identifying the unique and specific needs of their customers gained a competitive advantage over the rest by developing the right offers for their sub-markets. What inspired Smith into introducing market segmentation was his realization that heterogeneity existed in the demand for services and goods. His idea was based on the notion that market segmentation involved taking a heterogeneous market as many smaller homogenous markets.
This was brought about by the differing preferences as a result of the differing desires of consumers. Producers had to be more sensitive and precise in satisfying these varying wants of the consumers. According to the founder of market segmentation, Smith, segments arise as a result of heterogeneity of the wants of consumers. Market segmentation was able to move ahead of mass marketing during the late 1960s and it became the more popular marketing strategy (Wedel 2003). There are two general marketing approaches that are used by businesses.
These are mass marketing and marketing segmentation. In the mass marketing approach, the market is viewed as a whole and the consumers are all thought to be the same. Is this marketing approach more effective than market segmentation? I believe that marketing segmentation is much more effective of the two marketing strategies. This is because market segmentation views the entire market as being made up of different smaller segments that are unique from each other. Unlike mass marketing, market segmentation allows businesses to identify one or more unique differences in their customers and therefore target their products and services to satisfy these unique needs (Wedel 2003). A recent study (Cahill 2006) highlighted that an example of mass marketing would involve a company that produces similar products and markets them to all the consumers regardless of their unique needs.
In mass marketing, the company does not take into consideration the uniqueness of the needs of customers. Businesses assume that customers are the same and that they will all be satisfied with the same products.
The businesses do not bother to manufacture products that will suit the needs of different types of clients. I believe that market segmentation is much more effective than this to a greater extent. This is because, with market segmentation, there are multiple steps taken to define the markets in terms of the consumers and their unique needs. Market segmentation also involves dividing the market into groups, basing them on their characteristics and buying behaviors. Some of the characteristics that are considered in this division are the geographical locations of the consumers, their psychographic characteristics, the perceived benefits of the product and the demographic factors among others.
This, therefore, means that market segmentation is more likely to be effective than mass marketing. There have been many arguments about this and even though market segmentation may have a few disadvantages, the advantages are more. These advantages outweigh the advantages of mass marketing (Croft 1994).