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) itsaccessibility through promotional efforts, and (4) its appropriateness to the policies and resources of the company. The four basic market segmentation-strategies are based on (a) behavioral (b) demographic, (c) psychographic, and (d) geographical differences.

advantages
Market segmentation is useful when you have limited resources to deploy, so you need to make sure you're tapping the correct line to be able to hit your targets on schedule. - More efficient use is made of marketing resources - less waste. - A competitive advantage can be gained in a particular part of a market. - It's beneficial for small firms as uses less resources. - Products can be modified to be exactly what the consumer wants. - Marketing mix can be more targeted. - Guides marketing research - Improves satisfaction - Improves forecasting - Identifies competition and opportunities

Market Segmentation is defined as the process of splitting customers, or potential customers, in a market into different groups, or segments, within which the customers share a similar level of interest in the same or comparable sets of needs satisfied by a distinct marketing proposition; it is also explained as a marketing technique that targets a group of customers with specific characteristics, i.e. a particular group that has its own distinct customer profile and buyer characteristics so that for marketing purposes, it can be targeted separately from other segments of the market. It is a key ingredient for successful marketing as it simplifies the targeting, positioning and the planning process. Wikipedia explains Market Segment as a sub-

group of people or organizations sharing one or more characteristics that cause them to have similar product needs. A true Market Segment meets all of the following criteria: it is distinct from other segments (heterogeneity across segments), it is homogenous within the segments (exhibits common attributes), it responds similarly to a market stimulus and it can be reached by a market intervention. Market Segmentation simplifies the firms product, pricing, promotion and distribution strategies and also facilitates planning and organizing function of management more easily and cost effectively; but it requires a thorough understanding of the customers needs. It is referred as a tool for defining markets and thereby allocating resources; it uses statistical techniques called factor analysis and cluster analysis to combine attitudinal and demographic data to develop segments that are easier to target. Market Segmentation can be done on the basis of the location (Geographic Segmentation); on the basis of age, income, gender and other measurable factors (Demographic Segmentation); on the basis of lifestyle, likes, dislikes, taste and preferences (Psychological Segmentation); and according to the history, loyalty and responsiveness (Behavioral Segmentation). A business must analyze the different needs of the market segments; their internal strengths and weaknesses; external opportunities and threats; and various others factors like the mission, vision, values, beliefs, attitudes, norms and standards of the organization; as well as the competitors strategy, social and cultural factors, economic environment, global perspective, demographic environment, technological and political / legal aspects before deciding their own niche. Philip Kotler mentioned five criteria for an effective segmentation which states that Segmentation should be: 1. Measurable: - it should be possible to determine the values of the variable used for the segmentation. 2. Relevant: - it should justify the expected profits and the growth potential. 3. Accessible: - the target customers must be reachable and servable for the organization. 4. Distinguishable: - the target audiences must be diverse and able to show different reactions to different marketing mix. 5. Feasible: - the firm must have an ability to draw an effective marketing program for its customers. The following are the advantages of Market Segmentation for a firm: a) Helps in better understanding of the customers needs and wants. b) Better targeting and position of the product. c) Encourages two-way communication among the potential buyer and the organization. d) Maintaining effective relationship with the customers. e) Retaining the existing customers and attracting new ones. f) Improving service delivery standards. g) Reducing cost / expenses on various marketing activities and increases market share; resulting in higher profits. Finally, Market Segmentation is rightly referred as a marketing term referring to the buyers into groups (segments) that have common needs and will respond similarly

to a marketing action, it is an identifiable group of individuals, families, firms, or organizations, sharing one or more characteristics or needs in an otherwise homogenous market. Market Segmentation generally responds in a predictable manner to a marketing or promotional offer. As the burring of distinctions among firms increases in electronic markets, survival requires identifying your unique role in the market place in terms of value to the customers Kalakota and Whinstone.

Types of market

Basis of Market Segmentation Gender

The marketers divide the market into smaller segments based on gender. Both men and women have different interests and preferences, and thus the need for segmentation. Organizations need to have different marketing strategies for men which would obviously not work in case of females. A woman would not purchase a product meant for males and vice a versa. The segmentation of the market as per the gender is important in many industries like cosmetics, footwear, jewellery and apparel industries

 Age Group
Division on the basis of age group of the target audience is also one of the ways of market segmentation. The products and marketing strategies for teenagers would obviously be different than kids. Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines, apparels and so on

Income
Marketers divide the consumers into small segments as per their income. Individuals are classified into segments according to their monthly earnings. The three categories are: High income Group Mid Income Group Low Income Group Stores catering to the higher income group would have different range of products and strategies as compared to stores which target the lower income group. Pantaloon, Carrefour, Shoppers stop target the high income group as compared to Vishal Retail, Reliance Retail or Big bazaar who cater to the individuals belonging to the lower income segment.

Marital Status
Market segmentation can also be as per the marital status of the individuals. Travel agencies would not have similar holiday packages for bachelors and married couples.

Occupation
Office goers would have different needs as compared to school / college students. A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store as it caters specifically to the professionals.

Bases of segmentation

Market segmentation is permeated through all business. Its purpose is the concentration of marketing energy to gain an advantage within the segment of the market. The first, and most common, form of market segmentation is geographic segmentation. This is where companies will focus on specific geographic areas or locations. An example of this is when a company will choose to market their products in certain areas of the country, but not in others. This is because the tastes and consumer preferences of one region of a country may differ from another region. Price segmentation is also a commonly used example. This is when one company will offer certain products to certain household incomes. There will usually be a low-priced variety, a mid-price variety and a more expensive, or luxury, variety. A good example of a company using price segmentation

is General Motors. They have, throughout their history, offered a number of cars that vary in price from the low-price Chevrolet to the luxury Cadillac. The third example is demographic segmentation. This is where certain brands are exclusively targeted to certain demographic groups, for example a ladies perfume will be exclusively aimed at women, whilst men's aftershave will be aimed at the male group, even though they are manufactured by the same company. Time segmentation is not as common as the other forms mentioned but it can still be highly effective. An example of this is when certain products are only available at certain time periods during the year. Easter eggs go on sale in February, whilst Christmas cards will go on sale in late November. This is to meet the demand for these two occasions at the relevant times. There are other forms of segmentation that are commonly by businesses. These include media segmentation and psychographic segmentation. A concept in marketing and economics, market segmentation is a sub-set of a market that is made up of consumers that all have one or more characteristics that cause them to demand similar products or services based on product bases such as function or price. True market segments have all of the characteristics listed here such as common needs, a similar and predictable response to a market stimulus, and they can be reached by a market intervention. These are important bits of information for a company marketing a product to the public should know about. To respond to a particular market segment a company must come up with a marketing mix that will appeal to each segment they feel will be interested in their products. To do this a company must identify those customers, understand their behavior, and respond with the appropriate marketing programs that will best appeal to the segment they are seeking to reach. There are also certain market conditions that make for special circumstances. In a place where a company holds a monopoly, the price is almost always going to be higher than in places where there is competition. A company can increase profits even further by segmenting the market with differing prices charged to different segments. The segment that is willing and able to pay a higher price for a good or service is charged a higher price. The segment that is more price sensitive is charged a lower price. In today's global marketplace it is imperative that a company identify all market segments in order to shape their marketing programs to appeal to them. A strong drive to correctly identify all market segments followed up by a strong marketing program to reach each segment has more of a chance for success in today's competitive market where consumers have a wide variety of choices for mostproducts.

Search engine optimization (SEO) is the process of improving the visibility of a website or a web page in search engines' "natural," or un-paid ("organic" or "algorithmic"), search results. In general, the earlier (or higher ranked on the search results page), and more frequently a site appears in the search results list, the more visitors it will receive from the search engine's users. SEO may target different kinds of search, including image search, local search, video search, academic [1] search, news search and industry-specific vertical search engines. As an Internet marketing strategy, SEO considers how search engines work, what people search for, the actual search terms or keywords typed into search engines and which search engines are preferred by their targeted audience. Optimizing a website may involve editing its content

and HTMLand associated coding to both increase its relevance to specific keywords and to remove barriers to the indexing activities of search engines. Promoting a site to increase the number of backlinks, or inbound links, is another SEO tactic. The acronym "SEOs" can refer to "search engine optimizers," a term adopted by an industry of consultants who carry out optimization projects on behalf of clients, and by employees who perform SEO services in-house. Search engine optimizers may offer SEO as a stand-alone service or as a part of a broader marketing campaign. Because effective SEO may require changes to the HTML source code of a site and site content, SEO tactics may be incorporated into website development and design. The term "search engine friendly" may be used to describe website designs, menus,content management systems, images, videos, shopping carts, and other elements that have been optimized for the purpose of search engine exposure.

What are the objectives of SEO?

SEO gives surprisingly effective results in a short time if done efficiently, SEO is used for generating traffic to the site but there are also other applications of SEO like branding, marketing and ideological influence of the website. Following are the value generating objectives of SEO 1. Generating Traffic Content that is keyword targeted produces direct traffic to your website. Content provides great results in less time. SEO generates direct traffic to your website when your site is optimized for relevant keywords typed by user. Keywords should be unique, not common, because competition is very high for common and popular keywords rather than unique and different keywords. 2. Branding Branding is less popular application of SEO. Branding means brand recognition or brand awareness among people. A websites pages which are consistently at the top of search engine ranking get traffic, popularity and profit. 3. Marketing SEO is also used for marketing the products and services of any e-commerce website. SEO builds customers and generates revenue for the e- commerce website. 4. Ideological Impact Who want public opinion about their websites on a particular topic, SEO is very powerful tool to promote your ideas and content of your website. 5. E- Commerce Purpose SEO drives relevant traffic to e-commerce websites, which boosts the sale of the products and services offered by the websites. SEO should be done after identifying the goals or objectives of company. All goals should be given importance in optimization so that the site may get proper attention of users or customers in all services offered by the company.