Consumer As Segmentation Essay Research Paper 1

Consumer As Segmentation Essay, Research Paper

1. Introduction

Organizations that sell to consumer and business markets recognize that they cannot appeal to all buyers in those markets or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. Companies vary widely in their abilities to serve different segments of the market. Rather than trying to compete in an entire market, sometimes against superior competitors, each company must identify the parts of the market that it can serve best. Segmentation is thus a compromise between the rash assumption that all people are the same and the uneconomic assumption that each person needs a dedicated marketing effort. Within this essay, it is going to present the main considerations of the market segmentation, as well as the influence of consumer behaviour.

2. Concepts of the market segmentation

Markets consist of buyers, and buyers differ in one or more ways. They may differ in their wants, resources, location, buying attitudes, and buying practices. Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently with products and services that match their unique needs.

3. How to segment market

Because buyers have unique needs and wants, each buyer is potentially a separate market. Ideally, then, a seller might design a separate marketing programme for each buyer. However, most sellers face larger numbers of small buyers and do not find complete segmentation worthwhile. Instead, they look for broad classes of buyers who differ in their product needs or buying responses. For example, high- and low- income groups differ in their car-buying needs and wants. It also knows that young consumers. need and wants differ form those of older consumers. The task facing the marketing manager is to identity variable that describe the customers in terms of their inherent characteristics, and to link those variables to consumer behavior toward the product or service. The market segmentation planning process can be divided into five stages. Stage 1 involves the identification of dimensions that a company might use for segmenting its markets. Stage2 is concerned with the development of market segment profiles. Stage 3 is where the organization needs to forecast the total market potential for each segment. Within this stage, an analysis of competitive forces operation within each segment should be carried out as well as the definition of the marketing mix designed to serve each market segment. Stge4 deals with the application of forecasting procedures in order to calculate the company.s market share for each segment. During this stage, the company should also estimate the ratio between allocated costs and delivered benefits for each market segment. Stage 5 includes the assessment of delivered benefits from each segment in relation to corporate goals, which will provide the rationale and justification for further development of each market segment. This market segmentation decision process cycles is completed when the company decides on the selection of market target segment.

4. The bases of market segmentation

There is no single way to segment a market. A marketer has to try different segmentation variables, to find the best way to view the market structure. Some researchers try to form segments by looking at consumers. characteristics. They commonly use geographic, demographic, and psychographic characteristic. Then they examine whether these customer segments exhibit different needs or product responses. Other researches try to form segments by looking at consumer responses to benefits sought, use occasions, or brands. Once the segments are formed, the researcher sees whether different consumer characteristics are associated with each consumer- response segment.

1. Geographic segmentation

Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, stated, counties, cities, or neighborhoods. A company may decide to operate in one or a few geographical areas, or to operate in all areas but pay attention to geographical differences in needs and wants.

2. Demographic segmentation

Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality. Demographic factors are the most popular bases for segmenting customer groups. One reason is that consumer needs, wants and usage rates often vary closely with demographic variables. Another is that demographic variables are easier to measure than most other types of variables.

AGE AND LIFE-CUCLE STAE Consumer needs and wants change with age. Some companies use age and life cycle segmentation, offering different products or using different marketing approaches for different age and life cycle groups. For instance, many companies now use different products and appeals to target kids, teens, baby boomers, or mature consumers.

GENDERT Segmentation has long been used in clothing, cosmetics, toiletries, and magazines. For example, although early deodorants were used by both sexes, many producers are now featuring brands for a single sex.

INCOME segmentation has