Contemporary Business Studies - Academy of Knowledge Process ...

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International Journal of Contemporary Business StudiesVol: 4, No: 2. February, 2013 ISSN 2156-7506Available online at http://www.akpinsight.webs.com2. Facilitates management and utilization of better marketing opportunities: Market segmentationhelps to identify promising market opportunities because it builds interest in the marketing manto distinguish one customer group from another within a given market. So due to this awarenesshe is able to decide his target market. It also enables the marketer for optimal utilization ofmarketing resources, as the exact target group is identified at the early stages(Quinn & Dibb,2010).3. Facilitates effective advertising for better sales: Advertising media can be more effectivelyutilized because only the media that reach the segments can be employed. It makes advertisingresult oriented with lot of other benefits(Rennhak,2011).4. Provides special endeavors to small organization: Market segmentation offers special benefits tosmall organizations. Such organizations can select only suitable market segment and concentrateall efforts within that segment only for better marketing performance. And also can competeeven with large firms by offering personal services to customers within the specific segmentselected(Hansen,2009).5. The association of American Marketing explains the market segmentation as subdividing amarket into different homogeneous groups of customer which have same character, samebehaviors and demand. So this focused group of customer will be targeted and make theproducts as per their choice and need(Madhavan,2012).There are mainly three criteria that are used to determine market segments:1. Homogeneous nature (common attributes within a segment)2. Uniqueness from other groups)3. Reaction (similar response to market)The other considerations within the criteria above can be: Age, Gender, Education, Marital status,Lifestyle, Income, Family life cycle, Interests and beliefs.After gathering data and performing thoroughanalysis all this information has been compiled a description about potential customers can be made. Itmay be easier to locate them or even for expansion. Therefore, it is important that organizations mustcarry out good Market Segmentation. This way eventually they will enjoy the benefits from showingconsistency with their marketing strategy, and become more competitive with their target audience (Füller& Matzler, 2008).7. DE-LIMITING FACTORSIt is for a company where the focus is from product oriented to become truly customer oriented. Allprocess in the company should be devoted to satisfy customer needs and generate profit. We limit thescope of our research to analyze and give recommendations and feedback only for the marketing and salesactivities.8.LITERATURE REVIEWMarket segmentation is to make groups of customers based on common attributes and similar priorities.People in a segment possess same buying behavior. Therefore, same marketing strategies can be used forthem. According to Venkatesh (2011) market segmentation involves viewing a heterogeneous market as anumber of smaller homogenous markets in response to differing preferences, attributable to the desire ofcustomers for more precise satisfaction of their verifying needs(Venkatesh,2011).The market segmentation now in these days one of the best techniques of modern marketing anddistribution and dividing the group of customers on the basis of their common character like behavioral,2013©Academy of Knowledge Process48
International Journal of Contemporary Business StudiesVol: 4, No: 2. February, 2013 ISSN 2156-7506Available online at http://www.akpinsight.webs.comdemographic, psychological, geographic, and focused on these groups or segments. so this action makemarketer more focused on their target audience and make plans and products for this specific group ofcustomer. When we discussed market segmentation we need to consider three important areas ofmarketing also when and how we introduce and market our product (Tu, 2008). This first and mostimportant area of marketing is mass marketing. This mass marketing area consists of mass production,mass distribution and mass promotion of product for their customer. The second prime area isdifferentiated marketing of that product. The organization introduces different products for differentgroup of customers on the basis of their features, styles, quality and size. The last area is marketing oftargeted group of customers. The marketer choice large number of customers then pick up a group thathave common character on the basis of their age, size gender and choice then targeted specific group ofcustomers there are many common characters of consumers but normally we consider psychographics,geographic, demographics and behavioral segments(Zhang, Jiao, & Ma, 2007).8.1 Demographic segmentationThe marketer choice large number of customers then pick up a group that have common character on thebasis of their age, size gender and choice then targeted specific group of customers there are manycommon characters of consumers but normally we consider psychographics, geographic, demographicsand behavioral segments. In a demographics segment we also consider family size, family style, age,gender, family life cycle, income education, religion, generation, social class, occupation and nationality.Demographic segmentation is often used because the areas or variables of demographics are easilyidentify and measurable. Moreover demographic segmentation variables are common used for manyproducts and they provide common group of customers which facilitate marketers so they can approachthem easily. Demographic variable is useful for market segmentation and easy to use (Reichardt &Bornholdt, 2008)8.1.1 Age and life-cycle segmentationWe have another economic theory that each customer has different choice because of their age and whentheir age change their need, choices and preferences also change. Due to that reason many companies uselife cycle segmentation and age factor for common character. Age and life cycle play important role formarketers to choose targeted area(Barat, 2010). For example peoples of age 60 above used normallylandline telephone because mobile phones used modern technology so these peoples hesitate to usemobiles. On the other hand, teenager likes mobile phone due to their age and life cycle. So age and lifecycle play important role when we like to segment the market on the basis of landline and mobile phone.Although age and lifecycle segmentation is easy but marketers always careful y used these because ofstereotypes(Bauer & Auer-Srnka, 2012).8.1.2 Gender segmentationMale and female have different nature, attitude and their behavior is also different so gender segmentationis also used for market segmentation. We consider men and women on the basis of their different attitudeabout different products. When we consider gender segmentation then we also consider hairstyling,cosmetics, clothing, and their magazines. Marketers carefully introduce product on the basis of theirgender and metro sexuality (Wyly & Ponder, 2011).8.1.3 Income segmentationAnother very important factor of market segmentation is income segmentation we divided peoples on thebasis of their income, because income lead to expense and choice. Income segmentation is normally usedin automobiles, cosmetics, clothing, fashion, travel, and financial service industry. Because manycompanies of these above mention industries try focusing on high income customer because theseindustries products are expensive. Some other industries focused on low income customers because ofloyalty and prevent them from competitive pressure. Although income segmentation is important formarket segmentation but some time income segmentation not always predict more appropriate and2013©Academy of Knowledge Process49
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