The market is nothing but an aggregate of consumers of a particular product, it is quite possible that segments may occur within this whole heterogeneous (mixed/diverse) market. These segments are homogeneous (same/uniform) in characteristics on the basis of factors of segmentation.
There are essentially 5 types of segmentation:
(i) Geographic segmentation
For example, marketers gain information whether a product is popular in a particular area because it is useful to them because of their climatic conditions or not. Cold creams and body lotions will always be useful in northern most and north east India as their climate is always cold!
(ii) Demographic segmentation
If a premium brand of imported perfumes is to be marketed, then it should be strategically marketed in metro cities and towards high-income people!
(iii) Psychographic segmentation
Who would want to buy a Rs.50, 000, gold plated, Park Avenue fountain pen?
The SRKs and Amitabh Bachhans!
(iv) Price segmentation
The market segment of Audi and Renault cars will be different from the market segments of Nano cars!
Thus based on the price of goods, marketers segment their consumer base to gain a better understanding towards creating a beneficial marketing strategy!
(v) Buyer behaviour
Based on these factors too, marketers take important marketing decisions.
No advertising needed for bread/sugar/milk – why? – because these are daily use, essential commodities with high demand. Here users buy locally available bread/milk and competition does not matter.
On the other hand, body soaps of every type and company are heavily advertised, because they are essential commodities not bought daily (even though used) with heavy competition in the market! And brand loyalty keeps changing very frequently!
Sometimes it is Lux and sometimes it is Dove!
Market segmentation is an important practice undertaken by marketing executives of companies; it not only ensures successful marketing of their products, but ensures other important things such as consumer base, brand loyalty and ultimately profitability.
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