What is Market Segmentation?
Market segmentation is referred to as dividing the customers into a different set of homogeneous groups
where the company can directly target that homogenous group as the target market and the potential customers. The 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 to as the segment.
Market segmentation is being carried out to develop marketing activities, increase marketing effectiveness, also generating customer satisfaction, and create savings. They also identify the strategic opportunities and niches, allocate the marketing budgets, and at the same time adjusting of the products to the marketing needs.
This also helps towards the estimation of the level of sales in the market, also overcoming the competition effectively. In a few organizations, it helps to develop effective marketing programs and leads to the contribution of achieving the company’s goals.
Segmentation possesses different levels where the companies divide the large, heterogeneous market into smaller segments and thus they effectively reach the product or services and final match with the condition to fulfill the unique kind of needs.
The main benefit associated with 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 focus on the strategy of the organization.
The main disadvantage of segmentation is to target multiple segments 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 a loss due to the formation of wider brand equity.