Scribd
Upload
12 views25 pages

POM Notes

The document discusses market segmentation, which involves dividing a heterogeneous market into smaller, homogeneous groups based on shared characteristics to better meet consumer needs. It outlines the objectives, importance, benefits, and drawbacks of market segmentation, emphasizing its role in understanding consumer behavior and optimizing marketing strategies. Effective market segmentation requires criteria such as substantiality, measurability, accessibility, and responsiveness to ensure successful marketing efforts.

Uploaded by

gajanananayak1927281
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
12 views25 pages

POM Notes

The document discusses market segmentation, which involves dividing a heterogeneous market into smaller, homogeneous groups based on shared characteristics to better meet consumer needs. It outlines the objectives, importance, benefits, and drawbacks of market segmentation, emphasizing its role in understanding consumer behavior and optimizing marketing strategies. Effective market segmentation requires criteria such as substantiality, measurability, accessibility, and responsiveness to ensure successful marketing efforts.

Uploaded by

gajanananayak1927281
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
a MARKET SEGMENTATION AND CONSUMER BEHAVIOUR Introduction: | Market for most of the gcods is heterogeneou ' | | 3 homogeneous, because buyers di®er fromone anot i i purchasing power, geographical ocation, brying habits an ‘ practices. So, there arises the need for s-1b-dividing the total i (ie., the consumers) for a product into a number of sub-mi | seamen to capture a wide market. Undler the technique of market i legmentation, the total|market for a produc, i.¢.,the customers of § product, are divided into several homogeneous groups on the basis { of their common characteristics. {The division of the total market} | for a product into sub-markets is called market segmentation i | Definition and Meanmeemiier ict Segmentation: i | In the words of William J. Stanton, “Market segment: ation | . consists of taking the total heterogeneous market for a product | | and dividin i it into several sub-marksts or segments each of | which tend to be homnogenbous in all significant aspects.” l | According to Philip Kotler, "Market segment is the act of dividing a market into distinct groups of buyers who might merit | separate products and/or marketing mixes”. i ; In the words of R.S, Davar, “Grcuping of buyers ox segmenting the market is described as market segmentation.’ — | ee. Cundiff and Still, “Market segments are grouping i { | of consumers according to such characteristics as income, age, degree of urbanisation, race, or either classification, geog: vaphical location or education.” In the words of Philip Kotler and Gary Armstrong, ‘he process of classifying customers into groups with different needs, characteristics or behaviour i, called market segmentation. A market segment consists of mers vzho respond in a similar way toa given sei of marketing stimuli”. | . Market Segm¢n ation and Consumer Behaviour In the word: of Fredrick Webster, “Market segmentation is a method for ach 2ving maximum market response from limited marketing res: rces|by recog: ing differences in the response characteristics « £ various parts of the matket. It is a strategy of ‘divide and conc uer’ that adjusts marketing strategy to inherent differences in buyer behaviour". | | From these definitions, it is quite clear that|market segmentation means dividing the total heterogeneous market into several segments or sttb-markets, each of which has one or more homogeneous characteristics. Un short, market segmentation means grouping of buyers who have common characteristics as buyers ofa product or Service so that their needs are better served. Objectives of Market Segmentation: Inthe wards of Philip Kotler, "The purpose of market éegmentation is to determine difference among the buyers which may be consecniential in choosing among them or marketing to them”. According to Prof. lEsriond Pearce, “The purpose of market segmentation is to determine the difference among the purchasers which may affect the choice of market area or marketing methods". From these statements, it is clear that the object of market segmentaticn is to determine the differences among the buyers ofa product and to civide those buyers, onthe basis of those differences, into several groups so that different marketing policies, programmes and strategies may be prepared for every group of buyers, and maximum satisfaction may be provided to consumers and to earn maximum proftts for the firm. In other words, the main objective of market segmentation is to identify the differences among the consumers cf a product and to divide those consumers, on the basis of the differences identified, into several segments or groups to provide maximum satisfaction to consumers and to earn maximum profits for the marketer. Importance and Benefits of Market Segmentation: Market segmentation, if properly done, is advantageous to the marketer, the consumers and the community. Market segmentation offers several benefits. They are: 1. Understanding the needs of consumers: Market segmentation helps the marketer to understand fully the needs, behaviour and expectations of the consumers of different segments. When information is collected segment-wWise, the information becomes more precise and clear and becomes easily and effectively usable. Decisions made on the basis of such precise and clear information will certainly be more effective. 2. Better position to spot marketing opportunities: . Market segmentation helps the producer to make a fair estimate of marketing opportunities (i.e., the volume of his sales), On the basis of marketing research involved in market segmentation, the habits, tastes, nature, etc. of ae sumers of different markets can be understood deeply to eae hess marketing cnr is would be helpful to the producer to re-adjust the strategy/of approach suitably in regions where the response of the customers is poor : 3. Allocation of marketing budget: It is on the basis of market segmentation that marketing budget is allocated for a particular region or locality. In the regions where the sales opportunities are limited, a huge budget allocation is of no use, and so, budget allocation will be limited. On the o' in regions where there are more sales opportunitie: allocation will be more. Thus, market segmentation c money to the most profitable segments of the market. 4. WO iy the Pepcid effectively: Market ee of his tivals effectively. Ma of 4 aking deep study o} petitors in all the segments. This helps the produce rent policies, programmes ava strategies for different Ing into account the rij ffective marketing programmes: arket ogee helps the producer to adopt an marketing programme\ and serve the consumers ‘er at ly low cost. t i |; Discovering marketing op: Market segmentation helps in m hk research in all the segmerts. The habits, consumers of all the seer can be underst research helps in disco’ jering marketing | 11 eed marketing: 1] (When there is segme: ation of market, iar (specialised) and promotion can be bett acteristics of the buyers. More specialised x dvertisi ng. Personal selling cal e ciency. | 12. Provisio: of infe ormation: Market segmentation provides vario are useful in product planing and develo, evaluation of marketing activities, etc. Market Segmentat »n and Consumer Behaviout and physical distri ution|as per the divergent tesponse factors of each segment. | | 15. Formulation o: marketing mix: As theze is divergence in the character of different market segments, formulation of marketing mix for the entire market will | not be quite useful for attaining marketing and organisational objectives. But if information is gathered segment-wisd about the | jnarket forzes (1.e., about the customers and the competitors), and is used for formulation of marketing mix for each segment, such a marketing mix will be efféctive and capable of attaining the - marketing and organisational objectives. When there! is market segmentation, product development will be compatible with customers’ needs, product pricing will match with consumers’ - expectations, physical distribution will suit aie timely” | requirements, and Fromotional programmes will be in|tune with | customers’ willingness to Teceive and assimilate and poaiively react, +o communications. All thege will contribute to consumer , satisfaction and profit maximisation for the enterprise. | | 16. Making of suitable adjustments: When zhere is market segmentation, a firm can understand the nature of BO publishing firms concentrate apor ‘publishing books either in some selected subjects or for some selected standards: Diagram showing the concentrated marketing strategy: s | Concerted Marketing Strategy Advantages of concentrated marketing strategy: Concentrated marketing strategy has some advantages. They are: cee reer a (i) It provides the best possible satisfaction to the consumers. (ii) It facilitates the maximum exploitation of the resources of the enterprise fii) It decreases the ts ot production, and me), ie _ and administrative costs substantially a tiv) 1( helps the firm lo eam the maximum profit. limited resources of the firm. W) This strategy is quite suitable for introducing a ‘product. Dsadvantages of concentrated marketing strategy, The concentrated marketing strategy suffers fron), flowing drawbacks: Mi) This strategy increases the possibiliti: competition. of fi) This strategy is very risky, because, if wrong sexi are selected, the existence of the firm its endangered. ne Sdection bf a Suitable Marketing Strategy for Market | Sgmentation: As there are three alternative marketing strategies, and aseach ofthe three marketing strategies has its own mis * ani demerits, a firm can select any of these three stratcurs Tie selection of a particular marketing strategy depucs uyon _ the sizé, nature and requirements of th. We Hawever, there are certain factors which musi cmsidered, while Selecting a particular marketing stral-4y Ttose factors are: 1. Financial resources of the firm: Market segmentation sf} tegy involves heavy expendi" fa its implementation. So, financial resources 0! (he drectly affect the selection of marketing stratcyy. |! the has adequate financial resourtes, it will be better !° fimn to adopt differentiated\marketing s(ral*) umlifferentiated marketing strategy. On the other )< tz firm has not got enough resources, market segme*" ’ camot be undertaken at all, my \.2, . Homogeneous nature of market. Homogeneous nature of market also influences the selection of marketing Strategy. When-the market is of homogeneous nature, there is not much use of segmentation of market. Proper segmentation of market is required and is useful only when the customer preferences vary from group te group (i.e., when the market is not homogeneous). 3. Product characteristics or homogeneity of products: Characteristics of products of the enterprise also affect the selection of marketing strategy. If there is homogeneity in the products of an enterprise, undifferentiated marketing strategy may be selected, e.g., salt, kerosene, etc. On the other hand, if the products of the enterprise are different (i.e.. in the case of heterogenous products), differentiated marketing strategy\may be selected. 4. Nature of customers (or customer homogeneity): The nature of customers also influences the selection of marketing strategy. If the customs, habits and attitudes of the mass consumers are similar (or homogeneous), the firm may select undifferentiated marketing strategy. On the other hand, if the habits, tastes and the nature of the customers are different, it willbe better for the firm to select _ differentiated or concentrated marketing strategy. \ 5. Position or stage of product in the product life cy- cle; N The position or stage of a product in the product life cycle also influences the selection of marketing strategy. In the first Stage, ie., in the introduction stage, data cannot be collected, and so, market segmentation is meaningless. Undifferentiated marketing strategy may be selected. In the second stage, i.e., in the stage of growth or development, concentrated marketing strategy can be selected. In the stage of maturity and saturation, a _— ae vb OEE ES see differentiated marketing strate Auth ‘ «i decline, concentrated market stralegy will De tee the stage of obsolescence, it will be better to discon” the product, and so, the question of selection of marketin. [Link]. __ ———— y will be better 6. Marketing strategies of the competitors: Marketing strategies of the competitors also al selection of marketing strategy. If the competit selected differentiated marketing strategy. the en aiso should select the same type of marketing Otherwise, it cannot be successful. 7. Government policy: Government policy also affects the selection of ma strategy, in the sense that the selection of marketin; is affected by Government orders. For instan Government has issued orders for producing chea 4 differentiated or undifferentiated marketi be selected. QUESTIONS Define market segmentation. What are its obj¢ Explain the importance and benefits of ma What are the requirements for effective inat Explain the various bases for market seg Explain the alternative strategies towards n ee

You might also like