definition for market segmentation?

[Dolly]

can someone please tell what market segmentation is and why it is important within a business. I have googled it but none of what I found makes any sense. can someone please help me?

[John Stewart]

Hi Dolly

Market Segmentation.

Market Segmentation is the marketing process of identifying and breaking up the total market into groups of potential customers with similar motivations, needs or characteristics, who are likely to exhibit homogeneous purchase behaviour. Undertaking this process allows marketing efforts to be targeted at select groups. In determining their segmentation strategy, organisations can choose to pursue the whole market with a single offer (Mass Marketing), pursue only certain segments with specific offers (niche marketing) or pursue individual customers with specific offers designed just for them customisation).

The process enables a company to develop a suitable marketing mix for each of the chosen market segments. A Market Segment is a (relatively) homogeneous group of customers with similar characteristics, wants, needs or behaviours that is likely to respond similarly to a given marketing mix.

5 Ways or bases of market segmentation
1.Geographic Segmentation.
2.Demographic Segmentation (age, gender, income occupation etc).
3.Psychographic Segmentation (values, attitudes, social class, lifestyle and aspirations). Compare: value and benefits
4.Behavioural Segmentation (occasion, benefits sought, loyalty status, user status, buyer readiness).
5.Product differences.
Steps in segmentation. Process

1.Identify the total market.
2.Determine the segmenting dimensions.
3.Profile each segment.
4.Assess segment attractiveness.
5.Select target market.
6.Determine (marketing mix) for each segment.
Strengths of Segmentation. Benefits
•Organisationgets to know its customers better.
•Provides guidelines for resource allocation.
•It helps focus the strategy of the organisation
Limitations of the Segmentation. Disadvantages
•Targeting multiple segments increases marketing costs.
•Segmentation can lead to proliferation of products.
•Narrowly segmenting a market can hamper the development of broad-brand equity.
Book: Dowling, G. - The art and science of marketing; Marketing for marketing managers -
Book: Kotler, P., Brown, L., Adams, S. & Armstrong, G. - Marketing, 6th edition -
Book: Simpson, P.M. - Marketing segmentation and target markets; Marketing best practise's 2nd edition -


hope that is some help dolly

John Stewart
Lecturer Business Studies