Market segmentation
Generally companies aren’t big enough
to supply products/services to an entire market. A company cannot connect with
all the customers in large, broad and diverse markets. Consumers vary on many
dimensions and often can be grouped according to one or more characteristics.
Hence, market segmentation is the
process of dividing and subdividing a large homogeneous market into clearly
identifiable segments having similar needs, wants and demand characteristics.
In other words, market
segmentation is a marketing concept which divides the complete market setup
into smaller subsets comprising of consumers with a similar taste, demand and
preference.
Segmentation involves finding out
what kinds of consumers with different needs exist. In the auto market,
for example, some consumers demand speed and performance, while others are much
more concerned about roominess and safety. In general, it holds true that
“You can’t be all things to all people,” and experience has demonstrated that
firms that specialize in meeting the needs of one group of consumers over
another tend to be more profitable.
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