BENEFITS OF MARKET SEGMENTATION

Gautam S Rashingkar

Market Segmentation● Dividing a market into smaller groups of

consumers or organisations in which each consumer has a common characteristic such as a need or a want.

● It involves building up or breaking down of potential buyers into groups called market segments.

● By doing so the marketers will have a better understanding of their target audience and thereby make their marketing more effective

1. Geographic Segmentation

2. Demographic segmentation

3. Income segmentation

4. Behavioral segmentation

5. Psychographic segmentation

BASIS OF MARKET SEGMENTATION

Benefits Of Market Segmentation

OBJECTIVES: ● Better serve the needs of the customers.

● Improve company’s competitive position.

● Increase sales, improved market-share, enhanced image.

1. Facilitates the right choice of Target market:

It helps the marketer to identify potential buyers and pickup their target market effectively.

2. Facilitates effective tapping of the Chosen market segment:

It helps to know and analyse the demands of each customer group and make offers that match them.

Toyota India

3. Helps identify less satisfied segments and concentrate on them:

● Segmentation also helps the marketers to know the segment still waitingto be served and grabs them as a unique opportunity.

4. Helps to concentrate efforts on most productive and profitable market segment instead of frittering over irrevelant, unproductive /unprofitable segment.

5. FOCUS OF THE COMPANY● Segmentation is an effective method to increase the focus of

a firm on market segments.

● This helps a company in changing its focus for better returns.

● Thus companies base their strategy completely on a new segment which increases its focus and profitability.

e.g. Automobile companies have started focusing on small car segments.

6.CUSTOMER RETENTION

Segmentation ensures customer retention.

e.g. Titan watches.

● A watch is available for any customer who enters a Titan showroom, whatever be his age, budget.

● from fast track to Sonata and the high end watches(EDGE,HTSE,PURPLE,etc)

Titan has them by price segment as well as life cycle segment.

7. MARKET EXPANSION

● Segmentation plays a crucial role in expansion.

● One cannot expand in a territory without any idea of which segment of customers one will be dealing with.

● e.g Reebok targets fitness enthusiasts,

it has expanded into clothes and accessories from being a shoe manufacturer.

8. INCREASE PROFITABILITY

● It affects the profitability of the firm.

e.g. Nike, BMW showrooms.

● One of the USP’s of these brands is their segmentation. i.e they target segments which donot bargain or negotiate.Thus their profitability is high.

9. BETTER COMMUNICATION● Communication cannot be possible without knowing target

market.

● By limiting the audience, one can choose magazines,

websites, radio and TV stations, events that those customers

are more likely to hear, see, visit or attend.

● This makes the marketing effort more economic and efficient.

THANK YOU!!!