TERM OF THE DAY Market Segmentation Definition The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment. Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle. Four basic factors that affect market segmentation are 1. clear identification of the segment, 2. measurability of its effective size, 3. its accessibility through promotional efforts, and 4. its appropriateness to the policies and resources of the company. The four basic market segmentation-strategies are based on 1. behavioral, 2. demographic, 3. psychographic, and 4. geographical differences. Usage Example A company can be successful if it accurately carries out its market segmentation and targets the customers best fit for their product or service.
Posted on: Tue, 22 Apr 2014 06:42:10 +0000
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