P5 Market Segmentation Essay

Submitted By Salahcid
Words: 2000
Pages: 8
Open Document
P5 Market Segmentation
What is market segmentation?
Segmentation in consumer markets
Market segmentation is a very valuable technique used by companies when planning strategic marketing. It enables businesses to target products at the right customers more effectively. In essence, it is about identifying the specific needs and wants of the customer groups and then using the intelligence into providing products and services which meets customers' needs. After all, a business cannot satisfy all the needs and wants of all consumers. Each market segment is unique and is comprised of a number of individuals who share common thoughts and characteristics. Segmentation can also be applied within Business to Business markets, although this has large number of similarities to consumer marketing, many differences also exist and this is explored later on.

Market segmentation can be defined as the process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segments.

Each segment has its own profile made up of criteria commonly known as bases. A segment consists of;
1. A large identifiable group within the market
2. Similar wants and needs
3. Purchasing power
4. Geographical location
5. Buying attitudes/ habits and trends

Segmentation allows businesses to identify different groups within the market and apply different marketing and promotional techniques to each segment. It is not however necessary for a company to target every segment; they may wish to target specific segments as part of their strategic marketing plan.

Example: Motor vehicle companies such as Volvo develop a large number of models which are all aimed at different market segments in terms of lifestyle, gender, income and age. In addition to this, they also have services and products specifically aimed which caters for a large number of commercial businesses.. This includes vehicles for emergency services, taxi, limousines and special edition vehicles.
Identifying Segments

In order to identify specific segments, a number of related questions need to be thought about. These could include;

1. How big is the segment?
2. Is it profitable?
3. What is their buyer behaviour?
4. How can we promote and sell to this segment?
5. Is it achievable?
Markets can be segmented into various types and bases.

1. Psychographic: The basis of psychographic segmentation is the lifestyle of the individuals. It also includes aspects such as personality, values, perceptions, beliefs, attitudes and classes.

1. Geographic: The most common form of segmentation, where markets are segmented based on their geographic area. Regional differences in consumer preference are evident and companies must adapt their products accordingly. An example of geographic segmentation is the regional variation between brands in Europe. The UK is particularly diverse as products that are sold on the continent are sold in the UK under a completely different brand, even though the product is identical. Examples include the car brand Vauxhall which is sold elsewhere as Opera.

1. Behavioural: This divides customers into groups based on the way they respond to, use or understand a product. It can be grouped into terms of occasions, usage, benefits and loyalty. Occasions include when a product is consumed or purchased such as breakfast cereals or seasonal goods relating to events such as Valentine's Day. Usage can relate to the markets that are heavy, medium or light users. Loyalty relates to consumers that always purchase a certain brand â these are valuable customers. Companies segment their markets into those where loyal customers can be sourced and retained.

1. Demographic segmentation consists of dividing the market into groups based on variables such as age, gender, nationality, income, occupation and race.
Show More

Related Documents: P5 Market Segmentation Essay

Dynamic pool segmentation Essay

COMPUTERS, VOL. 4, NO. 12, DECEMBER 2009 Dynamic Pool Segmentation Model and Algorithm in the Car Rental Industry Yazao Yang School of Business Administration, South China University of Technology, Guangzhou 510640, China Email: scutyyz@gmail.com Wenzhou Jin and Xiaoni Hao Institute of ITS & Logistics, South China University of Technology, Guangzhou 510640, China Email: ctwzhjin@scut.edu.cn xnhao@scut.edu.cn Abstract— Pool segmentation is an essential step in the logistics management process…

Words 4271 - Pages 18

TASKSHEET Unit 3 Essay

marketing. Learners will then go on to investigate how organisations collect data through market research and turn it into useful information which can be analysed and used to plan their marketing activities. The segmentation and targeting of groups of customers is a key marketing technique and this is studied in detail. This includes the different bases for segmentation of both consumer and business markets. Next, learners will examine how a marketing mix is developed to meet the needs and aspirations…

Words 1535 - Pages 7

Essay on Marketing Research

Assignment IV BTEC LEVEL 3 CERTIFICATE IN BUSINESS By: Student Name: Tutor(s):BD Date: Date issued: 16.09.13 Date due in: 09.12.13 Unit Title: Unit 3: Introduction to Marketing Assignment Title: Marketing Criteria Covered by Assignment: P1, P2, P3, P4, P5, P6, M1, M2, M3, D1, D2 Brief Following your successful completion of your BTEC course you have been employed as a marketing assistant for the research organisation ‘Keynote’. They currently have a vacancy in their ‘Food and Leisure’ department…

Words 998 - Pages 4

Contemporary Overview Of Marketing

.............................. 9 P5. Macro and micro environmental factors that influence marketing decisions........................ 10 1. Macro Environment........................................................................................................... 10 2. Micro Environment ........................................................................................................... 11 P6. Segmentation criteria for two products in different markets ................................…

Words 3377 - Pages 14

Essay on Marketing Study Guide

More than selling and advertising Involves pricing, distribution, etc. Begins with needs Involves exchanges Builds relationships Such as partnerships Keys to becoming a more focused marketer Cannot be a mass-marketer Know your customer Market info, know as much as you can Make the products they want Use targeted and new media Use non-media to reach the customer Sponsorships (arenas, tournaments, organizations, sports, etc.) Reach the customer in the store Sharpen your promotions…

Words 1960 - Pages 8

Essay on Marketing Plan of Zero Green Tea

======================= Marks: Teacher’s comment: TABLE OF CONTENTS Page 1.0 EXECUTIVE SUMMARY 1 2.0 SITUALTION ANALYSIS 3 2.1 Customer analysis 3 2.2 Marketing analysis 4 2.3 Competitor analysis 5 2.4 Target market 7 3.0 SWOT ANALYSIS 9 3.1 Strengths 10 3.2 Weakness 12 3.3 Opportunities 13 3.4 Threats 14 4.0 MARKETING OBJECTIVES 15 5.0 MARKETING STRATEGY 17 5.1 Target marketing 17 5.2 Marketing mix 17…

Words 7232 - Pages 29

Business: Marketing and Royal Docks Community Essay

Unit 3 – Introduction to Marketing Describe how marketing techniques are used to market products in two organisations (P1) In this assignment I am going to be talking about the marketing techniques that are used to market products for two organizations. My organization from the private sector is Curry’s and my organisation from the public sector is The Royal Dock Community School. Marketing: Marketing is the action a business uses to boost the selling of goods & services to customers, employees…

Words 6079 - Pages 25

Essay on Cathay Pacific, Lufthansa and Thai Airways

Cathay Pacific, Lufthansa and Thai Airways p1/19 BBA2 - Marketing 1 – Prof. Taylor Term Paper – SS/02 Cathay Pacific, Lufthansa, and Thai Airways By Stefan Broda, Dennis Damer, Suttinee Keawsuwan, Yin Tong, and Li Xin Table of Contents 1. Introduction ............................................................................................................................ 2 2. About the Three Companies................................................................................…

Words 5957 - Pages 24

Essay on Nokia Analysis

With that said, the company holds current about thirty percent of the telecommunications market share worldwide, this being much larger than that of Motorola or Ericsson. (Nokia - a big company in a small country (2001)). Based upon 2005 figures from the 2005 calendar year, the combined company had EUR $15.8 billion in pro forma annual revenues…

Words 6428 - Pages 26

Solution Manual-Investment Essay

Part B END-OF-CHAPTER SOLUTIONS Fundamentals of Investments, 5th edition Jordan and Miller Chapter 1 A Brief History of Risk and Return Concept Questions 1. For both risk and return, increasing order is b, c, a, d. On average, the higher the risk of an investment, the higher is its expected return. 2. Since the price didn’t change, the capital gains yield was zero. If the total return was four percent, then the dividend yield must be four percent. 3. It is impossible…

Words 22203 - Pages 89