Market Segmentation

Types of market Segmentation

Market segmentation is basically division of market into different group. The groups are different from each other but the member within the group have same characteristic. The technical word for group with same characteristic is homogeneous group.

1. Age based Market Segmentation
2. Gender based Market Segmentation
3. Religion based market Segmentation
4. Social Status based Market Segmentation
5. Income based Market Segmentation
6. Region based Market Segmentation
7. Ethnic based Market Segmentation
8. Education based Market Segmentation

The following are important types of Market segmentation:

Advantages of Market Segmentation

1.Better Understanding :- 

The market segmentation is really helpful to understand the market dynamics.

2.Trend of Market :-  

The market segmentation also helpful to understand the trend of a particular market. for example one product is performing well in one market and other product is performing well in another segment provide information for the decision making.

3.Monitor Performance :- 

Market segmentation is also helpful to monitor the performance of the sales team specially if market segmentation is done on the bases of area or Supervisor. The effective monitoring of performance will result in improved efficiency of the sales team.

4.Improve Customer Relationship:- 

The market segmentation provide you to interact more with  your customer and have better understanding of your customer. The understanding of your customer would result in more information about customer expectation and this will help the management to satisfy customer need.

5.Setting Price :- 

The market segmentation especially with respect to product is provide detail information about the revenue contribution of product towards overall revenue and management can make effective decision about the prices of products.

Limitation of Market Segmentation

1.Difficult to define segment 

Sometime it really to define a segment especially in case service industry or organization offering single product or few products. for example if different region are used as segment then this segment is not suitable for compare the performance of different region as the different regions will have different level of population and different culture and different education level.

2.Segments are interlinked :- 

The one other limitation is that market segmentation the segment is taken in isolation where in practical market segment are really depends on many factor which are itself can be used as segment.

3.Too many product :-

 if organization has too many brands and range of product then to define the segment for a large number of market is not possible. even the mangment define the segment for large number of product it will not provide a helffull information. the decision making process will be more complex in such cases.

Advantages of Market Segmentation

1. Better knowledge and better understanding of the market
2. Hiring of specialist and more knowledge staff for a particular segment.
3. Exercise more control over performance of individuals
4. Setting accurate target and follow thereof
5. Help in setting more accurate budgeting of expenditure
6. More satisfied customer with improved service level
7. Development of product as per the requirement of customer.