The paper “ Strategic Marketing - Market Segmentation, Targeting & Positioning" is a persuading example of the essay on marketing. Customers are not alike. Not every offering is right for every customer. Every customer is not responsive to your efforts. This means you cannot bring your product to the awareness of every customer. In order to be successful, you have to adopt a targeted approach to ensure that your product and its promotional resources are used properly. So you have to organize your customers into groups that allow a targeted approach. This is called Segmentation.
Market segmentation is the process of dividing a market into distinct segments that have common needs. Each segment is reasonably homogeneous in the needs and behavior, so the customers in a segment respond similarly to a particular marketing strategy for products or services that are sold at a particular price, distributed in a particular way, and promoted in a particular way. The eventual result of the segmentation of the customers has enhanced customer satisfaction after using your product. By doing the segmentation analysis, you can establish, maintain, and see a growing customer base. How Markets are segmented? Markets can be segmented by criteria such as industry, public sector, private sector, etc.
Market segments can be of various types such as niche markets or specialty markets, consumer or industrial markets, etc. The process of segmentation is different from targeting and positioning. Targeting means choosing segments to address) and positioning means designing an appropriate marketing plan for each segment. The overall objective of Segmentation is to identify groups of potential customers having similar needs; prioritize those groups; understand their behavior, and give an appropriate response with a marketing approach that satisfies different preferences of each segment.
Improved segmentation leads to improved marketing success and the right market segmentation and advertising result in improved customer satisfaction and thereby improving the revenues. The basic requirements for successful segmentation are: there should be homogeneity within the segment, there should be heterogeneity between segments, the segments should be measurable, identifiable, accessible and actionable, and the segment should be large enough to be profitable. Factors influencing Market SegmentationMarket Segmentation is the process of splitting and segregating the market into groups on the basis of customer characteristics and needs.
It consists of activities like finding out the actual potential customers, identifying segments, doing an analysis of competitors' business in the market and finally selecting attractive and suitable customer segments. Competitor analysis is important in market segmentation because the market segments that are identified may not attractive to target. A company rarely experiences a monopoly since it is never alone in a chosen market. Competitors are omnipresent and they may have some bearing on the attraction of entering certain markets.
When there is more established competitor presence, obtaining a profitable market share is quite difficult and therefore a new company should decide not to enter that market. In other words, this segment is not attractive to target. Market Segmentation StrategiesThe most common market segmentation approaches used for dividing the consumer markets in Europe are geographic location, demographic factors, psychographic characteristics, and behavior of customers or apparent product benefits.