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Market Segmentation - Essay Example

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Market Segmentation Name: Professor: Institution: Introduction Market segmentation is a general term used in business to refer to a process of subdividing a market, which is homogeneous, into identifiable sets or segments characterised by similar needs and wants…
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Market Segmentation
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Download file to see previous pages Lastly, the company seeks for a unique marketing segment that is not being practised by their competitors. This plays a big role in enabling companies to achieve a high market share, thus generating a comfort factor since the buyers will see it as a market leader. Through this, most business entities are able to better their competitive positions and satisfy their customer needs (Burrows, 2010). For an adequate marketing strategy to take place, a manager has to determine and identify the boundaries within the market and with the help of a business plan, develop a clear definition of a business to be in operation. Then, the manager should get enough knowledge and all the relevant information about the goods and services provided by the competitors in relation to the basic requirements of the customers in the market. The company, therefore, would determine the methodology and variables to use in dividing its market into subsets. Research tools are introduced in the process of collecting and analysing data with the purposes of identifying a homogenous segment which, at the same time, is heterogeneous to the other segments. Basing on the consumers’ behaviour, a company selects the variables that will assist it in creating a detailed profile of each distinct segment (Burrows, 2010). Then the marketing manager looks for the potential customer with needs and wants that require being satisfied in respect to the business they had identified in the previous steps. Finally a product and market plan is developed to make an appeal to a specific market segment. All these combined together will attract a customer to purchase a particular product that will satisfy his or her needs and wants. Market segmentation is considered as a decision making tool for most of the marketing managers in the selection of a target market for their goods and services. Product differentiation techniques have frustrated companies’ expectations since they were purposed to provide a variety of products rather than offering different segments, therefore leading most of the companies to embrace the segmentation. Marketing managers use segmentation in defining the market, i.e. they are able to perceive their market from a consumer’s point of view rather than a manufacturer’s. Managers gain the knowledge and ability to rationalise policies for available commodities so that they can outshine their competitors by protecting their products from any competitive practice and also work towards achieving a high market share. They harmonise the different segments in a company by catering for the segments that are perceived to be more important, and minimising the competition between the goods and services within a company. This simply means that managers rely on the segmentation process to position ranges of their existing products (Croft, 1994). Since not all existing products can satisfy the needs of each segment, the managers identify the gaps and take an initiative of launching a brand new or an already available commodity to solve the shortcoming. Companies with small distribution channels use segmentation to sell their goods and services in specific parts of a country. A marketing manager uses the GNP per capita and different behaviours of the customers in the area of concern to determine the marketing strategy to be used in meeting their needs. Demographic variable in market segmentation explains ...Download file to see next pagesRead More
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