Market Segmentation Assignment Help

The starting point of segmentation is mass marketing. In mass marketing, the seller engages in mass production, mass distribution and mass promotion of one product for all the buyers. Henry Ford epitomized this strategy when he offered the Model-T Ford in one color, black. Coca-Cola also practiced mass marketing when it sold only one kind of Coke in a 6.5 ounce bottle.

The argument for mass marketing is that it creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. However, many critics point to the increasing splintering of the market and proliferation of advertising media and distribution channels, which are making it difficult and increasingly expensive to reach a mass audience.

Segment Marketing

A market segment consists of group of customers who share a similar set of needs and wants. Rather than creating the segments, the marketer’s task is to identify them and decide which ones to target. Segment marketing offers key benefits over mass marketing. The company can offer better design, price, disclose and deliver the product or service and also can fine tune the marketing program and activities to better reflect competitors’ marketing.

However, even a segment is partly a fiction, in that not everyone wants exactly the same present flexible market offerings to all members of a segment. A flexible market offering consists of two parts of solution containing the product and service elements that all segment members value, and discretionary options that some segment members value. Each option might carry an additional charge. For example, automobile companies in India offer different versions of the same model with different features. The base model of the vehicle may not have an air conditioner or power steering or power windows. But, for models that have these features, the buyer has to pay a higher price. Similarly, domestic airlines in India offer economy class and business or executive class for travelers and the prices of these two options differ significantly. The executive or business class passengers get extra facilities, such as more comfortable seats, better menu for food, and greater preference while checking in and boarding the aircraft.

We can characterize market segments in different ways. One way is to identify preference segments. Homogeneous preferences exist when all customers have roughly the same preferences. The market shows no natural segments. At the other extreme, consumers in diffused preferences vary greatly in their preferences. If several brands are in the market, they are likely to position themselves throughout the space and show real differences to match differences in consumer preference. Finally, clustered preferences result when natural market segments emerge from groups of consumers with shared preferences.

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Market Segmentation - Marketing Assignment Help

Market Segmentation - Marketing Assignment Help

Market segment is a subset of market. It is a part of a market. Just like a slice in a pizza, a market segment is used to divide market based on the type of consumers who are in that group. Dividing the consumers based on the ‘most likely’ people who will buy the product. A market in the broader sense cannot be addressed many a times as all customers cannot connect to all products. There are different consumers with different wants and based on these wants companies segment the market. It helps the company understand the needs of the consumer base. Focusing on certain consumers, a company can easily sell its products to them.

It’s very important that companies concentrate on market segments rather than on the whole market as such. For ex: entertainment industry is one of the best examples of market segmentation. Movies, music and T.V programs are based not on all the audience but on segments divided based on age, sex, education, income level and geographic location, etc. Movies and music can be divided based on genres and the consumers who consume them can be divided I.e. market segmentation can be done on the basis of genres like In Movies: Action, comedy, thriller, animation, etc. In music the various genres can be Hip hop, rock, classical, pop and trance, etc.

While there may be theoretically ‘ideal’ market segments, in reality every organization engaged in a market will develop different ways of imagining market segments, create product differentiation strategies to exploit these segments. The market segmentation and corresponding product differentiation strategy can give a firm a temporary commercial advantage.

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.

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