Protracted Description of Market Segmentation

Question: Discuss about the protracted description of market segmentation? Answer: Introduction: The aim of this report is to cut a protracted description of market segmentation and the various literature and theories associated with it. Here, the author has gone on a drive to explain the relevant and related marketing principles and ethos that constitutes market segmentation, by and large. Segmentation, as the name suggest, refers to a method of dividing or bifurcating a large unit or segment into various small units wherein; the units possess more or less similar or characteristic features which are about the central part. The following discussion elaborates the topic in consideration. Analysis: Definition: Market segmentation mainly refers to the course or development of defining and subdividing a large market of homogeneous natured into clearly identifiable segments or portions which own pretty similar characteristic features having similar needs wants, demands and others (Plank 2015). The primary objective of marketing segmentation is to devise an appropriate marketing mix that accurately matches or justifies the consumers expectation in the concerned segment. In other words, market segmentation is the marketing concept or notion which divides the entire market perception into smaller components which consist of similar demand, taste, and preferences (Chernenko and Sunderam 2012). A market segment is a small unit comprising of small units within a large market set-up comprised of like-minded individuals or subjects. It must be noted that one market segment is entirely diverse from the other component. A market segment is formed by people who possess similar interests and values and t hink on similar lines. Therefore, it is evident that individuals with each set of segments respond or acts in a similar manner to market whims and activities like fluctuation (Cross et al. 2015). Basis of market segmentation: The market is segmented by the factors mainly, gender, age group, income, marital status and occupation (Chan et al. 2012). Gender: While dividing the market, the marketers have considered gender as one of the essential elements. Both men and women have preferences. Hence, gender comes into play regarding market segmentation. Women would not buy male products and vice-versa. Hence, organizations need to have strategies customized for both men and women. Segmentation, in this regard, is mostly seen in cosmetics, footwear and jewelry industries (Fei et al. 2016). Age group: Age group is an important segment which forms the basis of the target audience. The products and items of teenagers would be different to that of minors or kids. For instance, the following goods and items cater to respective age group. Age group Items and products 0-10 years Baby foods, prams, toys, nappies, etc. 10-20 years School bags, books, apparels, etc 20 years and above Magazines, garments, cosmetics and others. Income: Experts divide the consumers by income and segment them as per their earnings. The three categories are High-Income Group, Middle-Income Group, and Low-Income Group. For instance, Audi cars target high-income group while Tesla Motors target middle-income cluster (Raza and Turiac 2016). Marital status: Market segmentation can also be performed based on a marital status of human entities. For instance, travel agencies would have separate packages for married couples and bachelors. Occupation: This forms an important foundation of market segmentation. For example, employed people would have separate needs to that of college youths or so. A corporate executive would prefer pastel colored formal clothing while college goers would consider for fancy items. Theoretical concepts: The three types of market segmentation are discussed as under. Psychographic strategy: Here the market segmentation is made by the means the culture, lifestyle, and ethnicity which are considered as psychographic strategy or theory. In this case, the individuals attitude, thoughts, ethos, faith, beliefs, and traditions are the determinant elements regarding market segmentation (Milln et al. 2016). Each human entity is unlike to others based on these fundamentals. For instance, high protein food items the likes of beef are consumed by people of the Islamic faith which are strictly not an option for Hindu population. McDonald doesnt normally sell beef items to Hindu major nations. But it may offer the same to countries where Muslim population assumes majority (Hollensen and Opresnik 2015). Behavior Strategy: Behavior segmentation portrays over how merchandise is used while demographics signifies at how each persons age, gender, familial status, income level and ethnic background, among other things, affect their purchases. In this case, the loyalty of a consumer or group of customers comes into play (Hugstad and Durr 2015). The loyalty or allegiance of customers towards a particular brand or brands helps the marketers to segment the market accordingly. For instance, consumers who are loyal towards British Airways do not prefer other carriers while traveling. The more loyal or trustworthy a customer is to the business, the more it generates business, and the overall consumer base will grow by leaps and bounds (Jayaswal and Jewkes 2016). Geographic segmentation: Geographic segmentation implies to the categorization of the market into different geographical areas. A marketer cannot comprise of identical strategies for people residing at varied places (Kuuru and Tuominen 2016). In other words, geographical strategies involve figuring of where the prospective buyers are located such as region, location, state, and nation. For illustration, Nestle endorses Nescafe all through the year in states which experience cold weather conditions of any country as compared to places which have distinctive summer and winter season. Summary: Selection of market segments is an important task. Firms should engage in some market research before embarking on market segmentation. Companies that use market segmentation strategies impeccably usually derive great profit, sales, and returns (Wedel and Kamakura 2012). Conclusion: The above discussion elaborately explains about nuances of market segmentation and target audiences. Here the author portrays about the means of strategies involved in segmenting the market. Targeting plus segmentation helps to get hold of part of a market which the players are not pursuing. Furthermore, the processes associated with targeting and segmentation supports analysis of types of marketing communication appealing to the different group. For instance, in the case of whitening toothpaste, segmentation may specify that the message to wine and coffee consumers who want to eliminate stains needs to be diverse than to young adults who want a fairer smile for social reasons. Segmentation also helps to market budget on track; in the case of limited funds, segmentation helps to figure out which group of prospects is likely to result in the most sales. Hence it is clear which one to pursue in the first place. References: Chan, K.Y., Kwong, C.K. and Hu, B.Q., 2012. Market segmentation and ideal point identification for new product design using fuzzy data compression and fuzzy clustering methods.Applied Soft Computing,12(4), pp.1371-1378. Chernenko, S. and Sunderam, A., 2012. The real consequences of market segmentation.Review of Financial Studies,25(7), pp.2041-2069. Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market segmentation: an exploratory study. InProceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference(pp. 531-536). Springer International Publishing. Fei, D., Feng, Y., Liang, L. and MingMing, Y., 2016. Do service providers adopting market segmentation need cooperation with third parties?: an application to hotels.International Journal of Contemporary Hospitality Management,28(1), pp.136-155. Hollensen, S. and Opresnik, M.O., 2015. 3.2 Market Segmentation, Targeting and Positioning. InMarketing(pp. 183-208). Verlag Franz Vahlen GmbH. Hugstad, P.S. and Durr, M., 2015. A study of country of manufacturer impact on consumer perceptions. InProceedings of the 1986 Academy of Marketing Science (AMS) Annual Conference(pp. 115-119). Springer International Publishing. Jayaswal, S. and Jewkes, E.M., 2016. Price and lead time differentiation, capacity strategy and market competition.International Journal of Production Research, pp.1-16. Kuuru, T.K. and Tuominen, P., 2016. Creating a Conceptual Framework for Corporate Brand Positioning. InBusiness Challenges in the Changing Economic Landscape-Vol. 2(pp. 177-195). Springer International Publishing. Milln, A., Fanjul, M.L. and Moital, M., 2016. Segmenting the Business Traveler Based on Emotions, Satisfaction, and Behavioral Intention.Psychology Marketing,33(2), pp.82-93. Plank, R.E., 2015. Conceptualizing the International Industrial Market Segmentation Problem. InProceedings of the 1985 Academy of Marketing Science (AMS) Annual Conference(pp. 58-62). Springer International Publishing. Raza, S.A. and Turiac, M., 2016. Joint optimal determination of process mean, production quantity, pricing, and market segmentation with demand leakage.European Journal of Operational Research,249(1), pp.312-326. Wedel, M. and Kamakura, W.A., 2012.Market segmentation: Conceptual and methodological foundations(Vol. 8). Springer Science Business Media.