Saturday 22 December 2018

What is Market segmentation

A Market segmentation is the process of dividing a market of potential customers into groups, or segments, base on different characteristics. The segments create are compose of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations. That the market segmentation is the process of dividing the market into segments with potential customers in common characteristics that indicate the existence of a buyer behavior in common.
Market segmentation

The Market segmentation

Market segmentation as a process of overall market division into groups – group a market consisting of people-people who have needs relative products similar.

There is another opinion that formulate market segmentation is an act to divide the market into segments – certain market segments which target sales that will be achieve with the marketing mix.

Market consists of buyers and buyers varies in a wide range of things that can be bought in the desire, resources, locations, the attitude of buying, and buying habits. Because each has unique needs and desires, each buyer is a potential market of its own.

The seller, therefore, ideally its marketing programs design for each buyer. Segmentation of a complete cost is high, and most customers are not able to purchase a product that is truly tailor to your needs. To that end, companies are looking for classes larger buyers with a buying product or needs a response. Market segment comprises the Group of customers that have a set of the same desire.

The benefits and drawbacks of Segmentation

The number of companies that conduct market segmentation on the basis of which certain variables. With groups or segment the market like that, it can be said that in general the company has motivation to maintain and increase the level of sales and more importantly so that companies operating in the long-term sustainable and competitive can.

Another Benefit with doing market segmentation, among others:

  1. The company will be able to detect early and precise about the tendencies in the market that is constantly changing.

  2. Can design products that are truly in accordance with the market demand.

  3. Advertising campaigns and can determine the most effective.

  4. Can direct the promotional funds available through the right media for the segment that is expect to generate bigger profits.

It can be use to measure the effort of promotion in accordance with the period or periods in which the market reaction is quite large.  adds the benefits of market segmentation, as follows:

  • Can distinguish between segments that one with other segments.

  • Be use to find out the nature of each segment.

  • Can be use to find which segment of its potential.

  • Can be use to select which segment would be use as target markets.

Though the Act of segmenting has a series of advantages and benefits, but also contains a number of risks and the weaknesses of the segmentation action itself, among other things:

  • Production costs will be higher, because the time period shorter production process.

  • Cost of research/market research will be increase in line with the abundance of variety and range of a define market segment.

  • Promotional Costs will be higher, when a number of media does not provide discounts.

  • Likely will face competitors who was aiming for a similar segment. It may even be unhealthy competition occur, e.g. cannibalism fellow manufacturers to the same products and segments.

Things to note in Doing Segmentation

Entrepreneurs who do market segmentation will attempt to classify consumers into multiple segments that are relatively It has homogeneous properties and then treat each segment in a way or a different service.

How far the grouping that had to be done, it seems that many of the factors that need to be paid in advance. These factors, among others, as follows:

The segmentation variables

As note that consumers have a variety of dimensions that can be use as a basis for conducting market segmentation. The basic use of the proper segmentation and Sepik will be better able to guarantee the success of a marketing strategic plan. One of the dimensions that are seen to have a major role in determining the market segmentation is the variables contain in the segment itself, and by reason of the it need study.

In this connection  classify segmentation variable types as follows:

The geographical Segmentation

Segmentation divides the market into different geographical units, such as the State, province, district, city, region, area or region. So with this segmentation, marketers gain certainty where or where the products are to be market.

Demographic Segmentation

Segmentation provides an overview for marketers to whom these products have to offer. Answers to who can now on age, gender, number of family members, family life cycle such as children, teenagers, adults, marrying/not yet mating, a young family with one child, families with two children, families his children are already working and so on. You may also now on the level of income, education, type of work, experience, religion and descendants

Such as: Java, Madura, Bali, Manado, China and so on.


In this segmentation buyers are divided into groups on the basis of:

  1. Social Status, for example: community leaders, educators, the elite, middle class, lower class.

  2. Life style such as: modern, traditional, old-fashioned, wasteful, save money, luxury and so on.

  3. Personalities, for example: fans, addict or observer of a product.

Behavior Segmentation segment your buyers behavior based on knowledge, attitude, use or their reactions to a product. Many marketers are sure that variable's behavior is the most excellent beginning to form market segments.Behavioral Segmentation can be measured using the following indicators (Armstrong, 1997):

The benefits you're looking for

One of the forms is a powerful segmentation segment your buyers according to different benefits they seek from the product. The segmentation benefits demanded it finds major benefits people are searching in the class of product, the kind of people who are looking for any benefits and major brands that have any benefits. Companies can use to clarify the benefits of segmentation segment benefits they want, its characteristics as well as major brands that compete. They may also seek new benefits and launching brands that provide these benefits.

The Status of the user

Market can be segmented into groups instead of users, former users, potential users, first time user and regular users of a product. Potential users and regular users might require different marketing exhortation.

The level of Consumption

Market can also be user groups segmented light, medium and heavy. The number of heavy users often times only a small percentage of the whole market, but produces a high percentage of total purchases. Users of the product are divided into two equal parts lot, most lightweight users and some heavy users according to the level of purchases from specific products.

Loyalty Status

A market can also segment based on consumer loyalty. Consumers can store brands, against loyal customer and company. Buyers can be divided into several groups according to their level of loyalty. Some consumers really loyal, they always buy a range of brands. Another group of somewhat loyal. They are loyal to the two brands or more than one product or brand like one. But sometimes buy other brands. Other buyers do not show loyalty in any brand. They may want something new every time they buy or anything on sale.

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