marketing segmentation
As consumer’s needs and preferences are increasing, the necessity of marketing also raised. In the study of Marketing, market segmentation is one of the key marketing strategies to look into. This essay is aimed to explain the concept of market segmentation and its benefits as a substitute to a mass marketing approach.
Considering successful market segmentation, it is vital to go through three activities called STP process that should be undertaken, usually sequentially, if segmentation is to be successful (Baines et al., 2011). STP process consists of three steps: segmentation, targeting, and positioning. In segmentation stage, there are various variables for identifying segments which are geography, demography, psychography and behaviour. West et al.(2006) states that geography focuses on the ‘where’ issue. The range varies from neighborhood to global. Demography mainly concentrates on ‘who’ issue. Gender and age are basis for demographic segmentation. In addition to basis factors, more specified groups can be used such as ethnicity, family size, working class. It is based on how marketer aims to separate groups. Psychographic bases centre on perceptual issues. These segments are determined by matching individuals who are psychologically similar in their orientation (West et al., 2006). Lastly, segmenting groups by behaviour builds groups based on responses to particular products or services.
Once the firm has identified potential market segments, targeting is the next step. Targeting is where firms make selection of potential customers to whom a business wishes to sell products or service. To measure the chosen segmentation, Kotler(2003) suggests five factors which are the most recognizable series of requirements to verify its effectiveness. They are (1) measurable, (2) accessible, (3) substantial, (4) differentiable, and (5)actionable. There are also four different targeting approaches: undifferentiated, differentiated, concentrated and customized.
Considering successful market segmentation, it is vital to go through three activities called STP process that should be undertaken, usually sequentially, if segmentation is to be successful (Baines et al., 2011). STP process consists of three steps: segmentation, targeting, and positioning. In segmentation stage, there are various variables for identifying segments which are geography, demography, psychography and behaviour. West et al.(2006) states that geography focuses on the ‘where’ issue. The range varies from neighborhood to global. Demography mainly concentrates on ‘who’ issue. Gender and age are basis for demographic segmentation. In addition to basis factors, more specified groups can be used such as ethnicity, family size, working class. It is based on how marketer aims to separate groups. Psychographic bases centre on perceptual issues. These segments are determined by matching individuals who are psychologically similar in their orientation (West et al., 2006). Lastly, segmenting groups by behaviour builds groups based on responses to particular products or services.
Once the firm has identified potential market segments, targeting is the next step. Targeting is where firms make selection of potential customers to whom a business wishes to sell products or service. To measure the chosen segmentation, Kotler(2003) suggests five factors which are the most recognizable series of requirements to verify its effectiveness. They are (1) measurable, (2) accessible, (3) substantial, (4) differentiable, and (5)actionable. There are also four different targeting approaches: undifferentiated, differentiated, concentrated and customized.