All markets are heterogeneous; market segmentation divides them into homogeneous Sub-Units. The market of any product has many segments. It is the aggregate of consumers of a given product. As we know that consumer of a product have varies in needs and characteristics. It means that the market for a product is fundamentally a heterogeneous unit. In order to capture heterogeneous market of any product, a marketer has to divide the market into segments and the process is known as market segmentation. It is a division of a larger market into submarkets based upon different needs or product preferences. An important factor in competitive success is to keep an eye on the little differences that give a marketing edge which is important to customers. People are different to each other’s and they have different needs and requirement and seek different ways to satisfy their needs, nearly all organizations, must use a Market Segmentation approach to target marketing. This approach divides markets into segments according to similar characteristics and needs. Markets can be segmented or targeted on several of factors including, Psychographic, behavioral, geographic and demographic.
Segmentation – target market
Market Segmentation is an art of dividing into segments according to the similar characteristics and needs. It is important for a business because it maintain wide range products for varied market. A marketing plan helps establish, organize, and integrate marketing efforts. It forces the organization to take a good, hard look at the current marketing situation. Marketing plans helps to keep the organization on the right path as it is a critical part of the business plan.
Market segmentation is a process of dividing a market into different homogeneous groups of consumers. Targeting or target marketing then involves deciding which customer segments the company will focus on. Marketing segmentation always ahead of targeting, it helps a company be more selective about who they are marketing their products to. In the segmentation process, your goal is the find customers who have similar needs. The strong market segments have 4 criteria in common:
Homogeneous - customers should have similar needs in their segment.
Heterogeneous - customers in different market segments should be as different as possible with other segments.
Economic Upside - the segment needs to be large enough to make profit.
Operational - the segment dimensions should be helpful for understanding.
Marketing segmentation and targeting are equally important for an overall success of a company. They are important for finding customers that are the best match for a business’s products and services. It is not possible to go after all customers because customers have different wants, needs and tastes. Some customers want to be stylish and price conscious. They will always go for that product which is more expensive. Other customers may be discount shoppers. They try to find the lowest price. Therefore, a company would have difficulty targeting both of these market segments at the same time with one type of product.
Primary and secondary segments
Primary target market is the group of customers that a company wants to go for. It is the segment of a market a business believes will give it the best chance to sell as it comprises the potential customers who are targeted by the companies. The primary target market, however, is more common than the secondary target market. Most of the business revenue comes from the primary target market because of its common characteristics and behaviors.
A secondary target market is including those customers second-most-likely to purchase a business' product or services. The characteristics of the secondary target market are different from those of the primary target market, but the secondary market is related to the primary market. The secondary target market usually includes future primary consumers, which are those buying at a higher rate within a small market segment. The secondary target market is worth marketing efforts because of its relation to the primary target market.
|Demographic||Age, gender, family size, income, occupation, race|
|Psychographic||Lifestyle, social class/ status, personality|
|Geographic||Region of the country like urban or rural|
|Behavioral||Brand loyalty (high, medium, none), product usage (heavy, medium, light)|
Example: Titan watches
Titan has segmented its product in different ways, fastrack- these watches are mainly for the young people. For old people they have created steel series and sonata.
Titan watches also focus on the psychographic variable. Watches are also made for those who wanted to have more than one watch into a separate segment and tempted them by offering a wide range of models. It also offered them matched one’s dress and occasions.
In light of the above explanation, it may be concluded that target marketing or market segmentation is based on customer needs and wants that can increase profits for a business. Target marketing categorizes the customer groups. Market segmentation helps a business to be more approachable to changing customer needs. An overall marketing plan or strategy visually shows how all characteristic of a marketing effort works together. Therefore, the ultimate goal of any business is to sell the products or services. All businesses set their plans according to their needs and requirement which is the key factor to success.