Market segmentation is referred as the dividing the customers into different set of the homogenous group where the company can directly target that homogenous group as the target market and the potential customers. Main aim of segmentation is to match the group of purchasers who can be placed within the same set of needs and buyers behavior. The group thus formed is referred as the segment.
Market segmentation is being carried out to develop the marketing activities, to increase the marketing effectiveness, also generating the customer’s satisfaction, and creates the savings. They also identify the strategic opportunities and niches, allocating the marketing budgets, at the same time adjusting of the products with the marketing needs. This also helps towards the estimation of the level of the sales in the market, also overcoming the competition effectively. At few organizations it helps to develop effective marketing programs and leads towards the contribution of achieving the company’s goals.
Segmentation possesses different levels where the companies divide the large, heterogeneous market into the smaller segments and thus they effectively reach to the product or services and finally matching with the condition to fulfill the unique kind of needs.
A main benefit associated with the market segmentation is the effective usage of the resources, gaining a proper focus, creating value for the target market and finally positioning. Also helps to know its customers in the proper manner and focusing towards the strategy of the organization. Main disadvantage for the segmentation is to target the multiple segments as by increasing the marketing cost. Segmentation may lead to the propagation of the product. And if the segmentation is narrow that the marketer may suffer the loss due to the formation of wider brand equity.