ADVERTISEMENTS: Advantages and Disadvantages of Market Segmentation! When you focus exclusively on a target market, you must be sure it works for your product or service. Efficient and economic marketing efforts: Segmentation makes marketing efforts both efficient and economic. Benefits to the customer: Segmentation benefits not only the marketer but the customer as well. If you dont know your market segment, what is their demography, what is their psychology, where they are from, what is their understanding level, then how can you form a communication message. Can you give references to the claims mentioned above. It helps the marketer concentrate on the fulfillment of the well defined needs of the specific segment. Another disadvantage of market segmentation is that it involves additional expenditure on the part of the company in the form of advertising, so in the above example a mobile manufacturer has to incur additional advertisement expenses for advertising mobile for young people apart from normal advertising expenses and if the benefit due to market segmentation is not there then the whole exercise of doing the market segmentation will be futile and wasteful expenditure. Prohibited Content 3. However, they are heterogeneous between segments. Which grade are the students in? Consumers are not a homogeneous lot. Remain aware of this potential disadvantage when you focus on a target market, and be prepared to change your tactics if you find you need more sales. Some businesses receive criticism for targeting certain market segments. Advantages of Segmenting the Market / Niche Marketing 1. 1. great article …..what are the disasvantages of market segmentation. Report a Violation, Market Segmentation: Definition and Concept of Market Segmentation, Market Segmentation: Top 10 Benefits of Market Segmentation. They are synonyms. Needs for market segmentation and why to market segmentation? For examples of market segments or niches, check out our niche market examples or freelancing websites. Imagine that you were in front of a curtain. A well and up to date research leads to successful advertising. I agree that it is crucial not to target customers as a homogeneous group. The segmentation done by you can be based on the company’s marketing mix. It is possible to distinguish one customer group from another. Mass marketing decreases along with the development of differentiated marketing. Morton points out that carefully and accurately defined market segments gives you a competitive advantage over competitors. Consumers in a segment have homogeneous needs and wants. If that segment is saturated with companies marketing to it, choosing that target market could hinder your sales rather than help them. To run a successful and effective campaign, research is a prominent factor. Market segmentation is a commonly used process in marketing to define and create distinct market segments from a larger target market, according to Business Dictionary. One characteristic of target markets -- their well-defined, limited scope -- can work against you if that segment does not contain enough customers. I love writing about the latest in marketing & advertising. In the same way, if you are targeting customers based on their demography (Ex –  reebok targets fitness enthusiasts) then you can expand in similar products (Ex –  reebok expanding with its fitness range of clothes and accessories). A company cannot devise a market strategy without market segmentation. Before publishing your articles on this site, please read the following pages: 1. You can follow me on Facebook. 3. You will find major example of customer life cycle segmentation in the Hospitality segment whether they be hotels, airlines, or hospitals. Yes Linda. I think a company worth mentioning here is Clusters, who have helped many companies achieve better targeting and accuracy! They are in fact targeting segments which have no need of bargaining or negotiation. If you dont ask these questions, the “Students” will be a very generic term for you, and you will have no idea whom you have to teach or what you have to teach. © 2019 They help the marketer to evaluate the results of his marketing programme. There are 6 main advantages of segmentation. A market is the aggregate of consumers of a given product. Segmentation is an effective method to increase the focus of a firm on market segments. You would go on about ruling parties, states, countries and politicians. Market segmentation can also result in over segmentation where individuals are excluded making it difficult to assess the profitability of the market. By tailoring the marketing programmes to individual market segments, marketers perform their tasks effectively. Similar problems could arise for a business selling firearms in a notoriously violent neighborhood. They differ a lot in their characters and buying behavior. The ones you exclude could offer you many sales, maybe even more sales, than the one you chose. For instance if one segment fails then the other segment(s) will contribute positively for the other segments as well. By using segmentation, Customer retention can be encouraged through the life cycle of a customer. Moreover, mass production is much cheaper than making a variety of products. He has been a college marketing professor since 2004. Thanks for sharing the significant information. TOS 7. Plagiarism Prevention 4. (ii) Larger inventory has to be maintained by both the manufacturer and the distributors. And the only thing your employer told you is that you have to teach students!! Content Filtrations 6. Segmenting markets offer tremendous advantages to companies and marketing firms. In summary –  The major advantages of segmentation lie in the fact that by targeting the right segment, you will walk away with a better company and a higher profitability. Concept & Advantages Explained With Example. It is absolutely necessary to target multiple smaller sub-niches creating a more detailed segmentation, which in turn reduces expenses. Geographic segmentation is one type of segmentation where expansion is immediately possible. The first and foremost advantage of market segmentation is that it results in better company performance as the company which has divided the market into smaller segments is likely to have a more focused strategy with regard to sales to that market segment than other company which has not divided the market into segments. Marketing efforts are focused on the well defined needs of the segment. Sometimes, market segmentation becomes an expensive proposition. Imagine that you became a teacher one day. Multi-segment marketing is a departure from the tradition of finding a target market and dedicating your small business to serving it. 1. All rights reserved. This segment was not a sizable one for Bata. (i) The marketer can spot and compare marketing opportunities. A marketer experiences considerable difficulties, as he has to develop different marketing mixes for different segments. The communications of a company needs to be spot on for its TARGET market. Cost of production rises due to shorter production runs and product variations. Essentially, the company that best understands what makes customers unique within a segment, and different from one segment to the next, wins. By better knowing your customer segments, you are most likely to deliver an effective value proposition that entices the customer to your brand. Customer segmentation or profiling helps businesses to create deep insights of their customers. Consider the example of mobiles if suppose a mobile manufacturer produces only one type of mobile which is costly and targeted only for rich people and another mobile manufacturer produces different types of mobiles like low cost mobile targeted at students and rural area, high cost mobile targeted for rich, mobile with good camera targeted at young people and so on. Target marketing means selecting a market segment and directing your marketing efforts toward that segment.

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