It is the process of breaking down a larger target market into smaller, more homogeneous groups of customers that you can more efficiently market to. Both consumer-oriented and business-oriented companies should segment customers using one of several common approaches. Demographics Demographic market segmentation is one of the most common approaches to segmenting markets.
Market Segmentation by Jerry W. Market segmentation is a much broader concept, however, and it pervades the practice of business throughout the world.
What is market segmentation? That is, the members of a market segment share something in common. The purpose of segmentation is the concentration of marketing energy and force on the subdivision or the market segment to gain a competitive advantage within the segment.
Concentration of marketing energy or force is the essence of all marketing strategy, and market segmentation is the conceptual tool to help achieve this focus.
Our focus is on consumer markets rather than business markets, but most of the following concepts also apply to B2B. Geographic Segmentation This is perhaps the most common form of market segmentation, wherein companies segment the market by attacking a restricted geographic area.
For example, corporations may choose to market their brands in certain countries, but not in others. A brand could be sold only in one market, one state, or one region of the United States. Many restaurant chains focus on a limited geographic area to achieve concentration of force.
Regional differences in consumer preferences exist, and this often provides a basis for geographic specialization. For example, a company might choose to market its red-eye gravy only in the southeastern U. Likewise, a picante sauce might concentrate its distribution and advertising in the Southwest.
A chainsaw company might only market its products in areas with forests. Geographic segmentation can take many forms urban versus rural, north versus south, seacoasts versus interior, warm areas versus cold, high-humidity areas versus dry areas, high elevation versus low-elevation areas, and so on.
These examples also reveal that geographic segmentation is sometimes a surrogate for or a means to other types of segmentation.
Distribution Segmentation Different markets can be reached through different channels of distribution. This type of distributional segmentation is common, especially among small companies that grant each channel a unique brand to gain distribution within that channel.
Other examples of distributional segmentation would be an upscale line of clothing sold only in expensive department stores, or a luxury hair shampoo sold only through upscale beauty salons. Media Segmentation While not common, media segmentation is sometimes a possibility.
It is based on the fact that different media tend to reach different audiences. If a brand pours all of its budget into one media, it can possibly dominate the segment of the market that listens to that radio station or reads that magazine. Media segmentation is most often practiced by companies that have some control over the media and can somehow discourage competitors from using that media.
Price Segmentation Price segmentation is common and widely practiced. Variation in household incomes creates an opportunity for segmenting some markets along a price dimension. If personal incomes range from low to high, the reasoning goes, then a company should offer some cheap products, some medium-priced ones, and some expensive ones.
This type of price segmentation is well illustrated by the range of automotive brands marketed by General Motors, historically.Using “niche marketing,” segmentation can allow a new company or new product to target less contested buyers and help a mature product seek new buyers.
Market segmentation was first described in the ’s, when product differentiation was the primary marketing strategy used. In the ’s and ’s, market segmentation began to take off as a means of expanding sales and obtaining competitive advantages. Jun 29, · Market segmentation is an integral part of a company's marketing strategy. It is the process of breaking down a larger target market into smaller, . There are 4 different types of market segmentation and all of them vary in their implementation in the real world. Let us discuss each of them in detail. Types of Market Segmentation 1) Demographic segmentation. Demographic segmentation is one of the simplest and most widest type of market segmentation used. Most companies use it to get the right population in using their products.
More efficient use of marketing resources by focusing on the best segments for your offering— product, price, promotion, and place (distribution). Market segmentation was first described in the ’s, when product differentiation was the primary marketing strategy used.
In the ’s and ’s, market segmentation began to take off as a means of expanding sales and obtaining competitive advantages. Psychographic segmentation is a legitimate way to segment a market, if we can identify the proper segmentation variables (or lifestyle statements, words, pictures, etc.).
Qualitative research techniques (focus groups, depth interviews, ethnography) become invaluable at this stage. There are various methods of market segmentation. There's no one way of segmenting markets, but here are a few examples of approaches that have been used previously.
There are 4 different types of market segmentation and all of them vary in their implementation. what would be the best market penetration strategy for new telecommunication company?
How can they build a strong brand image and the best segmentation strategy to penetrate the market? What method of Market segmentation . Market Segmentation is a process of dividing the market of potential customers into different groups and segments on the basis of certain characteristics.
The member of these groups share similar characteristics and usually have one or more than one aspect common among them.