Market Segmentation

Market Segmentation

Market segmentation is defined as the strategy as well as the process through which the entire market for a given product is broken down into segments. The market segments are comprised of consumers that have similar characteristics, and therefore the product addresses their needs that are much alike. According to Finch, (2012) market segmentation is critical to a company that aims to enhance the satisfaction of their customers by effectively responding to their needs.

The levels of market segmentation are divided into four (Finch, 2012). The first level is mass marketing where a company does not put any effort to differentiate between potential buyers. The company applying mass marketing usually treats all individuals that are found in the market as their target market. In mass marketing, it is assumed that there are no differences related to the product between the potential customers. The other level of market segmentation is segmented marketing that is also referred to differentiated marketing. In segment marketing, the customers are divided into clusters, and the selling company can develop and implement marketing plans for their brands by targeting the specific clusters in the market. In segment marketing, the marketing mix decisions are influenced by the customer needs and preferences in a specific market segment, and therefore the seller has a higher chance of achieving customer satisfaction when compared to the mass marketing. Niche marketing is a level of market segmentation that goes further to focus on much smaller parts of the market, and it is also known as concentrated marketing. At the niche level of segmentation, the sellers use thinner range channels of distribution as well as media alternatives to reach smaller markets that may contain a fewer number of directly competing for products. The main reason why a company may focus on niche marketing is the realization that there is a sizable group of people in the market whose needs are not being met by the existing products and by targeting that group of prospective buyers can result in meaningful profits. Due to the low level of competition from the big companies, niche marketing is favorable to the smaller firms that may apply it and enjoy the profits by filling in the existing gaps in the market. Finally, there is customized marketing that is also known as micromarketing. In micromarketing, the seller treats each prospective buyer as a market segment. Each gets a product that suits his or her unique needs (Finch,2012).

To capture the attention of buyers from both the baby boomer and Generation Y generations, personal computer manufacturers must consider in their market segmentation strategies. First, the manufacturer should understand that there are many differences between the preferences of the individuals in the baby boomer generation and their generation Y counterparts and mass marketing may not be successful. When creating segments, the manufacturers should pay special attention to the size and portability of the computers they are making. Generation Y individuals are known to be active users of social media, and therefore small portable computers that they can carry with them almost everywhere are more favorable to them as opposed to the desktops that most baby boomers are comfortable to use. Pricing is also a key factor when coming up with the segmentation strategies because most baby boomers may have a disposable income to spend on expensive computers but the generation Y has many people that are students and who may not afford expensive computers. An example of a company that has been successful in marketing across generation is Apple. Apple was able to realize that there was a group of people that were frustrated by using computers running using windows and produced alternative computers that are unique and popular across generations..

References

Finch, J. (2012). Managerial marketing [Electronic version]. Retrieved from https://ashford.content.edu

Finch, J. (2012). Managerial marketing [Electronic version]. Retrieved from https://ashford.content.edu

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