What conditions do you feel must be satisfied in order that market segmentation is effective? State the advantages and limitations of market segmentation with particular reference to consumer goods. Compare and contrast your findings with proposed theories and justify your conclusions.
Marketers recognized long ago that products and services couldn't be "all things to all people." Buyers have different taste, interest, goals, lifestyles, and so on. Among other things, the emergence of the marketing concept and the recognition of consumer needs and wants led marketers to think in terms of target marketing. Target markets are groups of people with similar wants and needs. For most companies, selecting target markets is the first step in the marketing strategy.
Target marketing clearly requires market segmentation. Thus Market segmentation involves the analysis of the purchases in the market, in particular the buying behavior, need patterns, socio-economic status or age. It is a consumer-oriented philosophy.
The main objective here is to divide the market into sector/segments in each of which the customers are of similar nature and are influenced by similar buying motives. For example, the shoe market can be divided into several segments based on the age and sex of the purchaser and the function of the shoe purchased. Such analysis permits the production of multiple similar products with an appeal to a different population group.
Market segmentation is the process of grouping a market into smaller subgroups. This is not something that is arbitrarily imposed on society: it is derived from the recognition that the total market is often made up of submarkets (called segments). These segments are homogeneous within (i.e. people in the segment are similar to each other in their attitudes about certain variables). Because of this intra-group similarity, they are likely to respond somewhat similarly to...