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Market Segmentation Essay

1845 words - 7 pages

     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 efficient use of marketing resources by focusing on the best segments for your offering – product, price, promotion, and place (distribution). Segmentation can help you avoid sending the wrong message or sending your message to the wrong people” (Klein). The question is when do we use market segmentation. The answer is, anytime you suspect there are significant, measurable differences in your market, you should consider market segmentation.
     There are things you should consider to see if a market must be segmented. The markets must be large enough to be segmented, if you try to split an already small market it won’t work. Differences must exist between members of the market and these differences must be measurable through traditional data collection methods (McElligott). Once the market is segmented, you must be able to design marketing communications that address the needs of the specific segments. If you can’t...

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