Answer on Other Management Question for Ndiyana
Maximum efficiency is achieved through market segmentation. Any market consists of buyers which differ from each other in their tastes, desires, needs and motives shopping. Therefore, manufacturers and representatives of sales organizations should be aware that it is impossible to take into account such a variety of factors influencing the decision to purchase the goods and services in a competitive environment, if to focus on the entire market. At the other extreme may be a production and sales of a limited range of products, designed for the average consumer.
The relation to the market as a differentiated structure according to consumer groups and consumer goods properties can ensure success in business.
Market Segmentation is a classification of groups of potential customers on the basis of differences in their needs, tastes, and/or behavior.
Depending on the nature of segmentation:
1) Macro-segmentation is the division of markets by region, country, and degree of industrialization;
2) Micro-segmentation is the formation of groups of consumers in one country (region) for more detailed criteria;
3) Deep segmentation is the process of segmentation begins with a broad group of consumers, then it gradually deepens (shoulder), depending on the classification of end-users of a group of goods (services);
4) Segmentation breadth - segmentation process starts with a small group of customers, and gradually expanded, depending on the application and use of the goods (services); for example, skates for professional athletes, skating for the fans, skates for young people;
5) Preliminary segmentation is the study the best possible market segments;
6) The final segmentation is the final stage of the market research; are determined the most optimal for the firm to the market segments in which it will further develop its marketing strategy.
Now we note the main four basic marketing segmentation-strategies:
Geographic segmentation is a way of dividing the market into groups of consumers by geography. This method is most effective in the case of cultural differences or climatic conditions in the sales regions that are fundamental importance for the use of the products.
The demographic method this is a way of dividing the market into groups of consumers on the basis of gender, age, ethnicity, family structure, annual income, religion, and others.
Psychographic segmentation separates a market by lifestyle as well as values and beliefs. This method of dividing the market for consumers based on their membership in a social class, lifestyle and personality characteristics.
Segmentation by type of behavior is based on the grouping of consumers making purchases, consumption rate, “relationship” to the product.
Segmentation can be focused and in accordance with the installation of the company's management (for example, only deal with wholesale customers and original equipment manufacturers, etc.). As a rule, this approach stems from the analysis of past performance, which is conducted in order to identify segments where it was possible to achieve the optimal balance between sales volume and profit, as well as to predict the further development of sales activity.
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