Target market segment

Segmentation refers to a process of bifurcating or dividing a large unit into various small units which have more or less similar or related characteristics. Market Segmentation Market segmentation is a marketing concept which divides the complete market set up into smaller subsets comprising of consumers with a similar taste, demand and preference.

Target market segment

Market segmentation Markets generally Target market segment into two broad types, namely consumer markets and business markets. A consumer market consists of individuals or households who purchase goods for private consumption and do not intend to resell those goods for a profit.

A business market consists of individuals or organisations who purchase goods for one of three main purposes; a for resale; b for use in producing other goods or services and; c for general use in daily business operations.

Market segmentation is the process of dividing a total available market, using one of a number of key bases for segmenting such as demographic, geographic, psychographic, behavioural or needs-based segments. Whereas a pyschographic segmentation might yield segments such as Young Singles, Traditional Families, Socially Awares and Conservatives.

Identifying consumer demand and opportunity within these segments should assist the marketer to idenfify the most profitable segments.

Although there are many different ways to segment a market, the most common bases used in practice are: Psychographic — Attitudes, values, beliefs, interests and lifestyles.

Behavioral — usage occasion, degree of loyalty, user status, purchase-readiness [8] Needs-based Target market segment — relationship between the customer's needs for specific features and product or service benefits [9] During the market segmentation process, the marketing analyst will have developed detailed profiles for each segment formed.

This profile typically describes the similarities between consumers within each segment and the differences between consumers across each of the segments.

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The primary use of the segment profile is to assess the extent to which a firm's offerings meet the needs of different segments. A profile will include all such information as is relevant for the product or service and may include basic demographic descriptors, purchasing habits, disposition to spend, benefits-sought, brand preferences, loyalty behavior, usage frequency and any other information deemed relevant to the subject at hand.

Additional research may be undertaken at this juncture to ascertain which segments require detailed analysis with the potentail to become target segments. Selecting the target market[ edit ] A key consideration in selecting the target markets is whether customer needs are sufficiently different to warrant segmentation and targeting.

In the event that customer needs across the entire market are relatively similar, then the business may decide to use an undifferentiated approach. On the other hand, when customer needs are different across segments, then a differentiated i.

Target market segment

In certain circumstances, the segmentation analysis may reveal that none of the segments offer genuine opportunities and the firm may decide not to enter the market. The primary market is the target market selected as the main focus of marketing activities and most of the firm's resources are allocated to the primary target.

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The secondary target market is likely to be a segment that is not as large as the primary market, but may have growth potential.

Alternatively, the secondary target group might consist of a small number of purchasers that account for a relatively high proportion of sales volume perhaps due to purchase value, purchase frequency or loyalty. However, these considerations are somewhat subjective and call for high levels of managerial judgement.

Accordingly, analysts have turned to more objective measures of segment attractiveness. Historically a number of different approaches have been used to select target markets. Under this approach, the business attempts to define the primary geographic catchment area for the business by identifying people who live within a predetermined distance of the business.

For a retailer or service-provider the distance might be around 5 km; for domestic tourist destination, the distance might be km. This method is used extensively in retailing. Using this method, the business allocates its resources to target markets based on historical sales patterns.

This method is especially useful when used in conjunction with sales coversion rates. This method is used in retail. A disadvantage of the method is that it assumes past sales will remain constant and fails to account for incremental market potential. This method is used to identify new business potential.

Primary research, typically in the form of surveys, identifies people who have not purchased a product or service, but have positive attitudes and exhibit some interest in making a purchase in the short-term. Although this method overcomes some of the disadvantages of other methods, it is expensive even when syndicated research is used.

Chain ratio and indexing methods: This method is used in marketing of branded goods and retail. It involves ranking alternative market segments based on current indices.

Widely used indices are the Category Index and Brand Index.May 24,  · How to Segment a Market. The best way to go out of business is to attempt to be all things to all people.

Market segmentation - Wikipedia

Not everyone can or will be your customer, but on a planet of more than 6 billion people, there should still be enough market for you to survive in, if not thrive. A target market segment strategy is an essential plan of action for any organization to adopt. Essentially, the strategy outlines your business's plans for reaching its intended customers.

Identifying a target market helps your company develop effective marketing communication strategies. A target market is a set of individuals sharing similar needs or characteristics that your. Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries that have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings.

Marketing > Segmentation. Market Segmentation. Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers.

Market Segmentation