Importance of Market Segmentation
In to-days competitive world, market segmentation plays very important role and support to the marketing firm to survive and prosper in the target market. This will be made more clear with the help of the following points.
i) Better Marketing Performance
The total market is very vast and also heterogeneous. Here market segmentation helps a firm to compete in a highly competitive market. It is needed in order to concentrate attention on specific target market and also to achieve better result in terms of turnover, profit, and customer satisfaction. In addition to this, it is necessary to overcome the threat from serve competition, in the market, for that also segmentation helps a lot.
ii) Appropriate Adjustment of Marketing Mix
Market segmentation is needed of in order to adjust marketing mix as per the needs and requirements of specific group of consumers. Advertising and marketing appeals can be made affectively through market segmentation.
iii-a) Introduction of Appropriate distribution Strategy
Market segmentation is required for divide and conquers strategy. It helps in designing distribution strategy and introduces different distribution mixes as per need of each segment. For example, high priced quality products targeted at upper class may require exclusive showrooms or dealerships.
iii-b) Brings About Progress and Awareness
Market segmentation not only enables the manufacture to develop a suitable product for the consumers of a segment but also helps bring about a level of progress and general awareness. For example in India Bisleri followed by others entered the packaged water industry. Thereby bringing in a positive development and also creating public awareness about the need for pure drinking water.
iv) Achieving Marketing Objectives
Market segment enables a company to identify its target market and develop market strategy to suit requirements of the target market. This helps in achieving its marketing objectives which, will be introducing a new product, increase in sales, goodwill etc.
v) Suitable Designing of Products
Market segmentation is needed to produce and supply goods to each segment exactly as per the needs and expectations of customers of each market segment. Companies produce goods with suitable modifications to meet the needs of different segments.
vi) Appropriate Price Fixation
Market segmentation process involves research that enables the company to understand the profile of the consumer such as their incomes, buying habits, buying motives etc. This helps in fixing the right price of the products.
vii) Better Service to Consumers
Market segmentation in needed as it acts as a base of present customer oriented marketing philosophy. It is needed in order to select and concentrate marketing efforts on a specific target market. As a result, customers of that market segment get better services from the special marketing programmes of the company.
viii) Timing of Marketing Efforts
Market segmentation provides information regarding suitable timing for advertising and sales promotions, measures in different segments. A company can use such information purposefully for sales promotion in different, segments. This gives promising sales to the company on yearly basis