Market Segmentation
To reach different markets or to promote your products to different locations or people one has to use a method called market segmentation. "Market segmentation describes the division of a market into homogenous groups which will respond differently to promotions, communications, advertising and other marketing mix variable" (Cumming). Market segmentation is extremely important for companies around the world. If a company doesn't research the area in which they are going to market or they put a product that is either to expensive or to elaborate in an area that can't afford that then they will fail as a company. In my paper I will discussion why market segmentation is used in around the world, the types of segmentation, some techniques used to make segmentation work the best. Market segmentation is to divide the market into smaller segments. The reason for dividing the market is to make it easier to address the needs of smaller groups of customers, particularly if they have many characteristics in common (Breen). It is easier if you find things in common that are the same such age, gender, benefits, lifestyles, etc. We also use market segmentation to find niches or to identify under-served or un-served markets. "Using niche marketing, segmentation can allow a new company or new product to target less contested buyers and help a mature product seek new buyers" (Cumming). Niche marketing can also take a normally large, identifiable group within a market, break it into sub groups so marketing can become easier. Niching offers smaller companies an opportunity to compete by forcing their limited resources on serving niches that may be unimportant to or overlooked by larger competitors (Mariotti). In many markets today, niches are normal, as agency executive observed, "There will be no market for products that everybody likes a little, and only for products that somebody likes a lot (Mariotti). Market segmentation is also used to be efficient. "More
Cited: Cumming, Betsy, "Cut Out For Success: Targeting Segments Can Help You Claim A Bigger Share of the Overall Market" Sales and Marketing: January 4, 1994; VNUeMedia Inc Klein, E. Karen, "Advertising vs. Marketing" Business Week: October 9, 2003; McGrain – Hill Companies © 2003 (www.businessweek.com). Mariotti, L John, "Maximize Your Marketing Dollars" Fortune Small Business: Monday, January 22, 2001; Time Inc © 2003 (www.fortune.com). McElligott, Tuim, "Customer Specific: The Art and Science Behind Amdoc 's Market Segmentation" Telephony: October 16, 2003