Segmentation enables the marketer to understand the needs of the customers and serve them well. Segments benefit the marketer in several ways which may be discussed under four heads: Sometimes, market segmentation becomes an expensive proposition. Concentrated Distribution When your focus narrows, so do your channels of distribution.
Of course, these companies did not all of a sudden change their minds about what kinds of products they pride themselves on; they merely shifted their focus in the hopes of better returns.
Disadvantages of Market Segmentation The first and foremost disadvantage of market segmentation is about the wrong selection of a segment, so if the company chooses wrong market segment which is too small or irrelevant for the business of the company then the company will not be able to sell its product.
Leading Objectives The first and most important objective of market segmentation is to produce a commercial advantage. A spa that caters to professionals, for example, might institute expanded evening hours to accommodate the demanding schedules working professionals often face.
Better service to customers: Less, but more powerful, distribution channels is a beautiful thing. Once a commercial advantage is obtained, marketing decisions become significantly safer and more powerful.
Even major players like Bata have erred in market segmentation. Promotional expenses, costs of keeping adequate inventory of each variety of goods etc.
Products with high market potential can be designed and directed to meet the satisfaction of the target market. They differ a lot in their characters and buying behavior. These products are remarkably similar, and yet they are marketed completely differently.
Timing of marketing efforts 7. Segmentation makes marketing efforts both efficient and economic. If we fast-forward seven or eight years, we see the release of the iPhone 5C and 5S. The idea is that once you figure out the high-density areas of customer interest, you can eliminate ineffective distribution channels and use these new, freed-up resources to pump those outlets that receive the greatest amount of traffic.
Efficient use of resources 8. Developing marketing programmes 4. Consumers are not a homogeneous lot. Specialization can be achieved in product distribution, promotion and pricing for catering to a particular segment. For this reason, immediate sales may drop. Different market segments may require different distribution mix.
The marketer can study the needs of each segment in the light of current offerings by the competitors. Assist in distribution strategies.Market segmentation is a marketing jargon used in the context of segmentation or division of the market by the companies, under market segmentation a company divides different market according to different variables like age, salary, geographical location, weather, culture and so on.
Market segmentation allows a company to target its products or services to a specific group of consumers, thus avoiding the cost of advertising and distributing to a mass market.
A disadvantage of segmentation is that it sacrifices economies of scale in production, distribution and communication. Market segmentation suffers from the following disadvantages: (i) Segmentation increases costs.
When a firm attempts to serve several market. Market segmentation can help a business identify underserved markets, which provide a golden opportunity for a business to establish itself as first in the market. Advantages or Benefits of Market Segmentation. Market segmentation consists of identifying a sufficient number of common buyers.
It enables subdivision of the total aggregate demand for a product into economically viable segments.Download