What is a Market Segment?
The marketing segment refers to a group of people who possess some similar characteristics, combined for the purpose of marketing. Every market segment is unique in itself and various criteria are framed by marketers to create a target market for services and products produced by them. Each segment is approached in a different way after understanding the lifestyles, demographics, personality, and needs of the target consumer.
Understanding Market Segments for Management Assignment:
A category of customers who are having similar likes and dislikes in an otherwise equivalent market is called a market segment. The customers involved in this category can be families, individuals, organizations, businesses, or a mix of multiple types. Market segments respond quite predictably to marketing plans, promotions or strategies. This is the reason why marketers use this segmentation strategy while choosing a target market. It is the process of segregating markets into sub-groups, wherein its members share similar characteristics.
There are three characteristics that must exist so that basic criteria are achieved for the market segment. Firstly, there must be similar needs and requirements of the segment. Secondly, some distinctions should be present to make the segment unique from other such groups. Last but not the least, there shall be the presence of a similar or common reaction to marketing. For example, market segment’s common characteristics include age, interests, gender, lifestyle, etc. Widely known examples of market segmentation are psychographic, demographic, geographic, and behavioral.
Ways through which market segments influence decisions making:
Decision-making is the process of choosing something from varieties of options. Every decision-making leads to some outcome that might be in the form of a recommendation, an action, or an opinion. To have effective management for an organization like Management Assignment Help, the manager needs to exercise decision-making at every footstep, he/she needs to excel in this front. Decision making comprises of various key activities, they are:
- Identifying alternatives
- Establishing objectives
- Classifying objectives
- Prioritizing objectives
- Developing a selection methodology
- Evaluating alternatives
- Choosing the most suitable alternative
- Implementing final decision
Let us discuss how decision-making can become very easy aftermarket segmentation.
Targeting: Targeting the right customer is entirely dependent on the market segment opted by you. For example, you have decided that you will include only “A” class customers in your market segment. In this case, your potential customers will be in the urban cities in the posh area. This shows that targeting customers becomes much easier after finalizing a market segment.
Positioning: Positioning is possible only after the market segmentation and completion of the targeting function. For example, you have an IT product which is having geographic segmentation and it is to be targeted to the masses. In this scenario, your positioning will be done by advertising the benefits and price of the product. If you wish to target the A grade segment, your positioning will be aimed at advertising based on class and status.
Providing more offers to customers: Customers tend to be attracted more towards those providers who offer them varieties of options. For example, a brand like Big bazaar is flourishing in the market because it provides all products in one place or under one roof. On the other hand, Pantaloons is thriving due to the feature of making available all other brands in one place. This is exactly what customers desire. They want options from low-cost brands to high-cost brands and being at the liberty of acquiring any variety of products or services as per their choice and preferences. Market segment helps very crucially in framing a clear picture of all the different choices and offers that suit customer’s interests.
Growth opportunities: While doing segmentation, there might be some segments that you may have ignored completely. These segments may be related to driving your business growth in the future. Thus, it is important to make sure every segmentation is exercised that may affect the operability of the business. It is advisable to include segmentation while preparing an annual business plan in order to verify whether new segments have emerged in the market or not. These segments may for your products or services and also see if any existing segment has some scope in the near future.
Understanding the market: The market is a mix of different classes and statuses of customers. Market segment is important for decision making because it segregates customers and provides a clear picture of potential buyers by conducting a study on their preferences and behaviors. Thus, this helps in segmenting the market in a proper and orderly manner and makes you satisfied that you have targeted each segment and have not left any portion of your potential customers.
Bottom line: The crux of the above-mentioned arguments is that you need to frame effective market segmentation on a timely basis to get a broad understanding of the market. To position the product better in front of customers and target your customers you must grab opportunities for growth. All these things are achievable with a proper market segment followed by adequate decision-making.
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