What is market segmentation?

Target marketing involves the identification of the most profitable market segments. Therefore, businesses may decide to focus on just one or a few of these segments. They may develop products or services to satisfy each selected segment.

A market segment can be defined as subgroup of people or organization, sharing one or more characteristics that cause them to have similar product needs.

The purpose of segmentation is the concentration of marketing energy and force on the subdivision (or the market segment) to gain a competitive advantage within the segment.

The market segmentation is mentioned as being one of the key elements of modern marketing and is, as mentioned, the process of dividing the market into several groups and/or segment(s) based on factors such as demographic, geographic, psychological and behavioral factors. By doing so the marketers will have a better understanding of their target audience and thereby make their marketing more effective
What is market segmentation?  

Market segmentation

Market segmentation refers to the various segments of the market based on the common characteristics of the customers. Thus a market segment consists of a larger identifiable group within a market.

It is the analytical process of identifying the groups of buyers on the basis of differences in their desires or requirements. Market segmentation is bending supply to the will of demand.

In order to divide the total market into appropriate segments, an entrepreneur must consider segmentation variables, which are parameters that identify the particular dimensions that distinguish one form of market behavior from another.

For most products, the total potential market is too diverse or heterogeneous to be treated as a single market. Organizations tailor their offerings to fit the carefully defined needs of specific groups of customers by dividing the public at large into specific sub-markets.

Once the market segment is clearly identified, it becomes easier for an organization to make a product to appear different from those of its competitors.

For companies trading in numerous countries around the world, there is clearly an enormous attraction in finding a single global segmentation model that can be applied to every country.

The experience of ‘globalization’ has highlighted for many of these companies that they have to ‘act local’ in order to succeed in their market.

The basic goal of market segmentation is to determine the target market, which consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Market segmentation

Target market

The target market is the specific group of consumers toward which a firm directs its marketing efforts. It is selected from the larger overall market.

In selecting a target market, marketing strategists examine potential markets for their possible effects on the firms’ sales, costs and profits.

No company can operate in every market and satisfy every need. No can even do a good job within one broad market. Even mighty IBM cannot offer the best solution for every information processing need. 

Companies do best when they define their target market carefully and prepared a tailored marketing programme.

Target market can be selected by appealing to the entire market with one marketing mix, concentrating on one segment, or appealing to multiple market segments using multiple marketing mixes.

Target markets could be smokers who are concerned about white teeth (for Colgate toothpaste), people concerned about sugar and calories in the soft drinks (diet coke) or college students needing inexpensive about town transportation (Yamaha scooter).

Correctly defining the target market is critical to creating a successful marketing strategy. Developing a marketing strategy for the wrong target market is a recipe for disaster.

The strategists attempt to determine whether the organization had their resources to produce a marketing mix that meets the needs of a particular target markets and whether satisfying those needs is consistent with firm’s overall objective.
Target market