Market segmentation is permeated through all business. Its purpose is the concentration of marketing energy to gain an advantage within the segment of the market.
The first, and most common, form of market segmentation is geographic segmentation. This is where companies will focus on specific geographic areas or locations. An example of this is when a company will choose to market their products in certain areas of the country, but not in others. This is because the tastes and consumer preferences of one region of a country may differ from another region.
Price segmentation is also a commonly used example. This is when one company will offer certain products to certain household incomes. There will usually be a low-priced variety, a mid-price variety and a more expensive, or luxury, variety. A good example of a company using price segmentation is General Motors. They have, throughout their history, offered a number of cars that vary in price from the low-price Chevrolet to the luxury Cadillac.
The third example is demographic segmentation. This is where certain brands are exclusively targeted to certain demographic groups, for example a ladies perfume will be exclusively aimed at women, whilst men's aftershave will be aimed at the male group, even though they are manufactured by the same company.
Time segmentation is not as common as the other forms mentioned but it can still be highly effective. An example of this is when certain products are only available at certain time periods during the year. Easter eggs go on sale in February, whilst Christmas cards will go on sale in late November. This is to meet the demand for these two occasions at the relevant times.
There are other forms of segmentation that are commonly by businesses. These include media segmentation and psychographic segmentation.
A concept in marketing and economics, market segmentation is a sub-set of a market that is made up of consumers that all have one or more characteristics that cause them to demand similar products or services based on product bases such as function or price. True market segments have all of the characteristics listed here such as common needs, a similar and predictable response to a market stimulus, and they can be reached by a market intervention.
These are important bits of information for a company marketing a product to the public should know about. To respond to a particular market segment a company must come up with a marketing mix that will appeal to each segment they feel will be interested in their products. To do this a company must identify those customers, understand their behavior, and respond with the appropriate marketing programs that will best appeal to the segment they are seeking to reach.
There are also certain market conditions that make for special circumstances. In a place where a company holds a monopoly, the price is almost always going to be higher than in places where there is competition. A company can increase profits even further by segmenting the market with differing prices charged to different segments. The segment that is willing and able to pay a higher price for a good or service is charged a higher price. The segment that is more price sensitive is charged a lower price.
In today's global marketplace it is imperative that a company identify all market segments in order to shape their marketing programs to appeal to them. A strong drive to correctly identify all market segments followed up by a strong marketing program to reach each segment has more of a chance for success in today's competitive market where consumers have a wide variety of choices for most products.
The first, and most common, form of market segmentation is geographic segmentation. This is where companies will focus on specific geographic areas or locations. An example of this is when a company will choose to market their products in certain areas of the country, but not in others. This is because the tastes and consumer preferences of one region of a country may differ from another region.
Price segmentation is also a commonly used example. This is when one company will offer certain products to certain household incomes. There will usually be a low-priced variety, a mid-price variety and a more expensive, or luxury, variety. A good example of a company using price segmentation is General Motors. They have, throughout their history, offered a number of cars that vary in price from the low-price Chevrolet to the luxury Cadillac.
The third example is demographic segmentation. This is where certain brands are exclusively targeted to certain demographic groups, for example a ladies perfume will be exclusively aimed at women, whilst men's aftershave will be aimed at the male group, even though they are manufactured by the same company.
Time segmentation is not as common as the other forms mentioned but it can still be highly effective. An example of this is when certain products are only available at certain time periods during the year. Easter eggs go on sale in February, whilst Christmas cards will go on sale in late November. This is to meet the demand for these two occasions at the relevant times.
There are other forms of segmentation that are commonly by businesses. These include media segmentation and psychographic segmentation.
A concept in marketing and economics, market segmentation is a sub-set of a market that is made up of consumers that all have one or more characteristics that cause them to demand similar products or services based on product bases such as function or price. True market segments have all of the characteristics listed here such as common needs, a similar and predictable response to a market stimulus, and they can be reached by a market intervention.
These are important bits of information for a company marketing a product to the public should know about. To respond to a particular market segment a company must come up with a marketing mix that will appeal to each segment they feel will be interested in their products. To do this a company must identify those customers, understand their behavior, and respond with the appropriate marketing programs that will best appeal to the segment they are seeking to reach.
There are also certain market conditions that make for special circumstances. In a place where a company holds a monopoly, the price is almost always going to be higher than in places where there is competition. A company can increase profits even further by segmenting the market with differing prices charged to different segments. The segment that is willing and able to pay a higher price for a good or service is charged a higher price. The segment that is more price sensitive is charged a lower price.
In today's global marketplace it is imperative that a company identify all market segments in order to shape their marketing programs to appeal to them. A strong drive to correctly identify all market segments followed up by a strong marketing program to reach each segment has more of a chance for success in today's competitive market where consumers have a wide variety of choices for most products.
