Market Segmentation Strategy

By Raul Bernardino

Introduction:

Nowadays, companies that are selling the products and services, either they are operating as the small or as the large company, it has to be adopted the market segmentation strategy in order to be sustained or survived in the long run of the business.

The market segmentation is the way to identified or grouping the customers or entities that have similar needs, demands, and also aim to have best qualities of the goods and services, including how to pricing the goods and the services for this specific group. It is also to differentiate customers’ needs and demands from one region to other regions before doing the real marketing.

“There is no single way or method to segment the market”, Armstrong, G. and Kotler, P. (2010). It has to use deferent approaches or ways to determine the best to structure the market.

There are variables that use in market segmentation as follows:

Geographic: this segment is to determine the customer location, either the location scope are worldwide, per region, country focus, cities or metros, including climate and also density. The localization of the goods and services, including promotion and advertising are now becoming a trend for the companies to fulfill the demands and needs of the customers in that domain.

Demographic: this segment is to determine or grouping the customer with ages, gender, family size, family life cycle, income, education, occupation, race, religion, generation and the nationality. The demographic factors are varying from on region to other region including needs from different ages and family life style as well. It is also depending on the group of incomes and occupation.

Psychographic: this segment is to determine customers or grouping them base on the social class, lifestyle, and people characteristics.

Behavioural: this segment is to determine customer base on the knowledge, attitude, customers that responds to the products, and the uses of the products. There are several customers that are loyal to the certain products and services also have high rate of products usage etc.

To answer, the first discussion question 1, where stated that: is it good idea for small company to adopt a differentiated segmentation strategy? The answer is yes. As it explained in the introductory that to be sustain in the market small or larger companies have to adopt market segmentation.

The advantages of have the market segmentations are:

1.     Able to identify the customers’ needs, wants and demands per location, per demographic, per behavioural, and per psychographic

2.      The accessibility of the target can reached and able to measure the target group with the promotions and advertisements (communication means)

3.     The target group can be measured the size and determine that the target group is sufficient for market plan

4.     The target group can be measured for the future profit making plan

5.     Able to identify the target group in which has a unique needs and wants

The disadvantages are:

1.     Need lot of resources to prepare the market segmentation strategy

2.     Market research is time consuming

3.     The needs and wants including the demands of the customer may change because of the time difference of market research and real marketing the products and services.

Conclusion: 
To assess those parameters for market segmentation, any businesses will allocate resources to obtain information. It is not a case anymore; with the current technology industries whereas becomes a back bone and take roles to obtain the right information at the time and with a very minimum cost.

References list:

• Armstrong, G. and Kotler, P. (2010) Principles of marketing,13th edition, Global edtition: Prentice Hall
•  Lecture notes: PRNMKT_week3_lecture
• Chaffey,D. (1998), Effective E-Marketing, The Critical Factor for Success, [on-line]. Available from:  http://www.smartfocus.com/LinkClick.aspx?fileticket=OK8TGVMciW4%3D&tabid=178&language=en-GB   (Accessed Date: July 22, 2011)
• Market Segmentation, [on-line]. Available from:  http://jhcblog.juliehuntconsulting.com/market-segmentation/ (Accessed Date: July 22, 2011)