Market segmentation long has been considered one of the most fundamental concept of modern marketing. Segmentation has become a dominant concept in marketing literature and practice. Besides being one of the major ways of operationalizing the marketing concept, segmentation provides guidelines for a firm’s marketing strategy and resource allocation among markets and products. Faced with heterogeneous markets, a firm following a market segmentation strategy usually can increase the expected profitability. Market segments refers to the sub-classes of the market reflecting sub-classes of wants and the process of conceptually distinguishing segments is known as the process of market segmentation.
Market segmentation allows a marketer to take a heterogeneous market, a market consisting of customers with diverse characteristics, needs, wants and behaviour and carve it up into one or more homogenous markets which are made up of individuals or organizations with similar needs, wants, and behavioral tendencies.
Market segmentation is a process of dividing a market into groups of segments having similar wants. However wants must be interpreted very broadly, in terms far broader than product characteristics. Segments may differ also in their needs for information, reassurance, technical assistance, service, promotion, distribution and a host of other ‘nonproduct’ benefits that are part of consumer purchase. They may also differ in their capacity to pay for these differences. A marketer’s view of a product is different from others and is based on the customer’s preference to similarly-priced rival brands on the grounds of certain differences arising out of the physical aspects of the product, the kind of image projected by the marketer, the kind of services offered and convenience in using or buying the product.
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