Summary

Market segmentation is used to meet consumer needs because segmentation is the process of dividing a potential market into distinct subsets of consumers with a common need or characteristic. Then the process selects one or more segments to target with a specially designed marketing mix. Segmentation helps the development of new products and assists in the redesign and repositioning of existing products. This will be through the creation of promotional appeals and the selection of advertising media. There are three important objectives of the segmentation process which are to gain new customers, sustain the existing consumers and introduce new products for the existing consumers and gain new ones. In order to achieve these three objectives, the market segmentation process follows five steps. Establish the market and targeted consumers, market mapping, analysis of the consumers' demand, group consumers by need groups, finding new market.

The first step in developing a segmentation strategy is to select the most appropriate base(s) on which to segment the market. Nine major categories of consumer characteristics provide the most popular bases for market segmentation: Geographic segmentation (Region, city size, density of area, climate), demographic segmentation (Age, sex, marital status, income, education, occupation), psychological segmentation (Needs-motivation, personality, perception, learning -involvement, attitudes), Psychographic (Lifestyle), sociocultural segmentation (Cultures, religion, subcultures (Race/ethnic), social class (Family life cycle), use-related segmentation (Usage rate, awareness status, Brand loyalty, geodemographics), use-situation segmentation (Time, objective, location, person), benefit segmentation, and hybrid segmentation (Demographics/psychographic).

Summary

Implementing segmentation strategy is very vital for firms to develop their products. Market strategy includes three important phases; Market segmentation, the target and positioning. Firms that use market segmentation are applying either a concentrated marketing strategy or a differentiated marketing strategy. In some instances they use a counter segmentation strategy.