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Understanding of Market Segmentation - Report Example

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This work called "Understanding of Market Segmentation" describes marketing segmentation, its concepts, bases of segmentation. From this work, it is obvious about the advantages of each base of segmentation as well as its limitations. The author outlines the five categories of market segments…
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Understanding of Market Segmentation
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Download file to see previous pages Companies recognize the difficulties of reaching wider markets because of differences in cultures, lifestyles, and competition. Buyers are unique, they live in different areas, have different backgrounds, goals, and interests. Competition has been fierce and increasing. Because of this, it is not surprising to find companies turning to segmentation. In order to have a share of the market, companies must find market segments where their products can be competitive and profitable.
Web definition of the term market segmentation is the “aggregating of prospective buyers into groups that have common needs and will respond similarly to a marketing action.” Market segmentation was first described in the middle of the 1950s by Wendell.R.Smith, an American professor who said: “Market segmentation is to divide a market into smaller groups of buyers with distinct needs, characteristics” (Shi Lin, 2009). To describe it in another way, as Shi Lin (2009, p. 64) puts it, it is splitting up a whole market into a smaller, identical group.
Since the market is composed of different people with different needs, market segmentation has become an important marketing tool. Market segmentation helps the company to know what are the needs and wants of customers more accurately. An example is people who want cars, but we all know there are different types of cars; we have a luxury, sports.
Not all companies can supply the needs of the whole market, so they need to find out who will buy their products. Lack of information may lead to wrong decisions that may cause the company’s downfall. Market segmentation is also one way of knowing market opportunities. Thru market segmentation, marketers will have a way of knowing if the needs of the target market have been fully met or satisfied, or in the process discover potentials. A lot of information may also be recovered during the procedure so that it can design the correct marketing plan that considers product, price, sales promotion, selling a place, plus other issues. ...Download file to see next pages Read More
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