Marketing Segmentation - Essay Example

It becomes crucial for the manufactures to analyze the underlying driving forces determining the choices and preferences of the consumers. The global market in the contemporary world is highly heterogeneous in nature. The inclinations of the consumers are different for the same goods and services produced in the economy. Thus, it becomes crucial to categorize or segregate the buyers possessing the same characteristic features of tastes and preferences. This process of grouping buyers in terms of several common determinants is known as market segmentation (Wind and Douglas, 1972).

Market SegmentationIt is believed by many scholars that market segmentation is an alternative to product differentiation. In today’s world, market segmentation plays a vital role in formulating all marketing strategies adopted by a firm. It creates different samples of buyers with the same type of demand patterns that help a company in designing separate marketing plans for each group and thereby facilitates them to win over customer loyalty for all the divisions. A particular market can be divided or categorized according to psychological, demographics, geographic, and behavioral determinants.

A proper marketing mix formulated by a firm would help it to suffice the demands of each segment separately, in an economic and efficient manner. This paper will implicitly explain the concept of market segmentation based on demographics (McDonald, 2012).Demographics in Market SegmentationWhen the segmentation of a market is done on the basis of demographic factors like age, sex, caste, class, etc, then it is known as demographic market segmentation. It is empirically found that customers with the same demographic features have similar types of tastes and preferences patterns.

Thus, by segmenting the whole customer base in terms of demographic determinants, an organization can create excellent strategies of marketing that would help it to park a potential customer base in its retail segment. It becomes very convenient to apply the demographic methodology of market segmentation because it is easy to calculate the demographic variables during the procedure of market segmentation. Moreover, the factors on the basis of which demographic market segmentation is introduced can generally be used for almost all the products (Tyan, 1987).

Life-cycle and Age It is analyzed by the economists that the nature of demand created by a buyer changes with age and time in the life-cycle process. The companies while making their business plans target consumers on the basis of age to sell their manufactured products. If a firm produces landline telephones, then it should realize that the potential buyers of such a product would be consumers of age group 60 years and above. This is because the old consumers will have less skill to use modern complicated technologies in mobile phones.

On the other hand, it would be wrong on the part of the company to analyze that the buyers of landline phones would be young in an age in general. So the market is segmented on the basis of landline and mobile phones, age and life-cycle become a vital mode of market segmentation (Hoek, Gendall, and Esslemont, 1995).GenderThere is a significant difference in the likings of men and women. Thus, while marketing a product a company must first segregate the marketplace on the basis of sex. Men and women possess separate attitudes about the same type of commodity.

Companies dealing with cosmetics, magazines, etc should always segment their market while launching marketing strategies and plans. Like, if a company desires to sell a foundation base in makeup, then it is obvious that the target customers would be women (Raaij and Verhallen, 1994).IncomeIncome is another important factor that determines the demand created by the consumers. Perhaps, this is the most important factor in demographic market segmentation. The purchasing power of a consumer affects the demand actually created by them.

Even if the consumers desire to create a demand for a commodity, the actual demand cannot be created if the demand of the consumer is not backed by proper economic power. Thus, while formulating marketing plans, a company must analyze the target group of the consumers on the basis of income. Like if the consumer sells rich diamond jewelry, then the potential buyers would be the elite class people. This is because diamonds are status symbol products such products are generally affordable by the rich consumers (Dibb and Simkin, 2013).

GeographicThe geographical location of consumers also determines their claim over certain types of goods and services. Thus, sometimes while launching new promotional plans companies must categorize market segments on the basis of the geographical locations of the consumers. Like, those people who live in cold regions would demand more woolen clothes. If a company desires to augment its sales for woolen garments, then it should devise special marketing plans for those buyers who live in cold regions (Aziz and Nas, 2013).

ConclusionIn the modern world cost of almost all business operations is increasing. The aggregate cost associated with the marketing of a product is highly expensive for a company in the current economic system. Companies are appointing analysts, who would help them to reduce the costs of sales and marketing.