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Jumat, 02 Desember 2011

What is Market Segmentation?



Definition

The process of defining and subdividing a large homogenous market into clearly identifiable segmentshaving similar needswants, or demand characteristics. Itsobjective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle. Four basic factors that affect market segmentation are (1) clear identification of the segment, (2) measurability of its effective size, (3) its accessibilitythrough promotional efforts, and (4) its appropriateness to the policies and resources of the company. The four basic market segmentation-strategies are based on (a) behavioral (b) demographic, (c) psychographic, and (d) geographical differences.

Market segmentation is a strategy that involves dividing a larger market into subsets of consumers who have common needs and applications for the goods and services offered in the market. These subgroups of consumers can be identified by a number of different demographics, depending on the purposes behind identifying the groups. Marketing campaigns are often designed and implemented based on this type of customer segmentation.
One of the main reasons for engaging in market segmentation is to help the company understand the needs of the customer base. Often the task of segregating consumers by specific criteria will help the company identify other applications for their products that may or may not have been self evident before. Uncovering these other ideas for use of goods and services may help the company target a larger audience in that same demographicclassification and thus increase market share among a specific sub market base.
Market segmentation strategies can be developed over a wide range of characteristics found among consumers. One group within the market may be identified by gender, while another group may be composed of consumers within a given age group. Location is another common component in market segmentation, as is income level and education level. Generally, there will be at least a few established customers who fall into more than one category, but marketing strategists normally allow for this phenomenon.
Along with playing a role in the development of new marketing approaches to attract a certain demographic within the market base, market segmentation can also help a company understand ways to enhance customer loyalty with existing customers. As part of the process of identifying specific groups within the larger client base, the company will often ask questions that lead to practical suggestions on how to make the products more desirable to customers. This activity may lead to changes in packaging or other similar changes that do not impact the core product. However, making a few simple changes in the appearance of the product sends a clear message to consumers that the company does listen to customers. This demonstration of good will can go a long way to strengthen the ties between consumer and vendor.
Market segmentation requires a major commitment by management to customer-oriented planning, research, implementation and control.

There are four major benefits of market segmentation analysis and strategy:
    • Designing responsive products to meet the needs of the marketplace.
    • Developing effective and cost seeicientpromotional tactics, campaigns.
    • Gauging Your company's market position--how your company is perceived by its customers and potential customers relative to the competition.
    • Fine tuning current marketing strategies.
    A three-step process is used to develop a market segmentation strategy: 
    1. Segment Identification — determining a given number of homogeneous market segments based on selected segmentation variables and criteria. Segments should be customer-focused, a justifiable size, distinguishable, accessible, accountable & profitable.

    2. Market Selection — selecting one or more groups to target for marketing activity. You must make strategic choices based on customer needs, competitive opportunities, corporate objectives, and your firm’s financial, technical and marketing resources.

    3. Positioning
     — carving out a market niche for your firm. This may be accomplished by searching out unique marketing advantages, seeking new market segments that competitors are not cultivating, or developing new approaches to old problems.

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