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Market Segmentation

The division of a market into groups having identical wants is called market segmentation.

Benefit of market segmentation

(a)    Segmentation helps a company to exploit its market by selecting suitable segments at par with its resources.
(b)    Segmentation helps in developing state-gees for target groups.
(c)    Segmentation result in customer’s loyalty towards the firm.

Basis of segments
Segments are formed based on customer preferences, demography, life style etc. Some of the factors that aid in segment formation are:

(a)    Benefit Segmentation:

Benefit segmentation includes the kind of people who look for benefits, and brands that delivery benefits.

(b)    Social class:

Social class has  a storing influence on persona’s preference in reference to clothing, furnishing habits.

(c)    Family life cycle:

Family life cycle includes a combination of age, marital stairs and number of children.

(d)    Demographic basis:

This includes age, sex, family size education, income, religion, occupation and nationality.

(e)    Psychograph basis:

This includes Market segmentation used on the life style. Some of the aspects included in are clothing beverages, furniture, cosmetic and automobiles.

(f)    Brand loyalty:

Normally heavy users of a product are loyal to particular brand.

There are two approaches in market segmentation:

(a)    Logical Approach on top down approach:

In this, the market is divided into sub classes based on product. And customers.

(b)    Ordering approach or down top approach:

 This can be used as and alternative to logical approach. Market structure analysis is techniques used to show the perceived position of products and based on it, the brand is evaluated.

Selection of segments

(a)    Company thrust:

The firm should idently the success factors int ht erarget market and then selects segments.

(b)    Profitability:

This is associated with investment division.

(c)    Risk:

There are usual risks associated with the extent to which a particular target armlet would respond.

(d)    Competition:

The market segmentation includes the selection of competitors with whom the compact will compete with.

(e)    Mobility:

Mobility is the in and out movement of a segment of members of tragedy group.

(f)    Growth:

The growth potential of the market should e considered before selecting the segment.

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