In this blog, we will discuss the objective of market segmentation and its benefits of market segmentation. Companies can not connect with all customers in large, broad, diverse markets. However, they can divide such markets into consumer segments or groups with definite requirements and wants.
A firm can’t satisfy every customer with the same product, no matter how effectively it designs the product and its marketing mix. It happens because customers are too numerous in buying requirements. At the same time, most companies can’t offer a customised product for every consumer in a market at a cost that all consumers can afford. Marketers must divide consumers into groups so that each may be satisfied by a certain product in order to create a successful marketing plan.
Meaning of Market Segmentation
Market Segmentation is a marketing strategy of dividing the customers of a product into several homogeneous groups. It is based on common characteristics such as income, age, sex, education, profession, etc. The main aim of market segmentation is to prepare separate marketing programs or strategies for each segment. So that marketers may provide maximum satisfaction for consumers of different segments. Market segmentation plays important role in marketing management. In the next section, we learn the objective of market segmentation.
Various Objective of Market Segmentation
The major objective of market segmentation is.
1. Grouping of Customers
The main objective of market segmentation is to group customers based on their homogeneous characteristics such as nature, habit, behaviour, income, age, religion, etc.
2. Optimum Utilisation of Resources
Targeting the market provides détails of the customer and their needs. It aids producers for marketers. If the market is segmented, marketers can produce the product according to consumers’ desires. So, the product will meet the consumer’s demand, and there will not be a waste of resources.
3. Better Service
The objective of market segmentation is to provide better service. If the market is segmented, the marketer can concentrate all the resources, tools, skills, and techniques, & thus it will improve the service of the organisation.
4. Market Specialization
Market Segmentation leads to Market Specialisation. Steady and continuous service in the distinct markets gives full market knowledge. It makes the marketeer expert in the market. The products, human resources, and organisational policies become customer friendly.
5. Increases Efficiency
Segmentation minimises the size of the market. With the decreasing size, the activities to be performed by the market organisation also decreases. So, the workload for the marketeer will be decreased. It will enhance the capacities of the marketeers. Therefore, the objective of market segmentation is to increase organisational efficiency.
Key Benefits of Market Segmentation
The benefits of market segmentation are as follows.
1. Higher Success Rate
The benefits of market segmentation help marketers in breaking the large market into smaller modules. To better understand the potential of the market and its consumers. It lowers the risk of failure and increases the likelihood of the firm succeeding.
Market segmentation helps businesses target specific market segments and uncover greater commercial prospects in those sectors. Thus, according to the benefits of market segmentation, marketers can create campaigns based on needs and requirements, increasing business profitability. This strategy allows organizations to focus on a certain market sector, which increases earnings.
When the focus and target market is determined, then comes competition. As the business learns more about its target market, competition will increase, and the marketing team will develop new ways to promote its brand. Different offers and discounts can assist the marketing team in attracting more consumers, and understanding them better will boost brand loyalty.
4. Customer Retention
Market segmentation helps businesses retain clients. Once the business knows the consumers, the marketer may meet their requirements, and their experience with the market brand will help them connect with the product/service.
5. Offers Market Opportunities
Using market segmentation, opportunities are found. It is one of the main advantages of market segmentation. The corporation can create its brand in market sectors where consumers are dissatisfied with competing brands. Companies can work in these categories to offer better products than those already on the market and win consumer loyalty. Thus, market segmentation creates opportunity.
6. Effective Market Campaigning
As the firm knows the consumers and their demands, the marketing team may tailor or personalise their marketing strategy accordingly, directly affecting the business’s success.
7. Higher Customer Satisfaction
Market segmentation guides the company to make its marketing efforts consumer and market-oriented in a certain market segment. It helps the company serve the consumers better, boosting customer happiness, the ultimate goal of the business. Therefore, it is one of the advantages of market segmentation.
What is Market Segmentation and Why is it Important?
Market segmentation is the sub-dividing of a market into homogeneous subsets of costumes, where any subset may conceivably be selected as a market target to be reached with a distinct marketing mix. The importance of market segmentation is as follows: 1. Adopting an effective marketing program
2. Better assessment of the competition
3. Knowledge of marketing opportunities
4. Proper allocation of resources
What are the 5 Benefits of Market Segmentation?
The advantages of market segmentation are as follows:
1. Market segmentation helps in increasing the success rate.
2. Customers are satisfied when their needs are fulfilled.
3. New ways are helpful to capture the market share.
4. When the marketer knows about the need of customers, then customer retention is possible.
5. It will help in increasing the profitability of the company.