What is a market segment? Define market segmentation and discuss why market segmentation is important to the well-being of most companies.
What will be an ideal response?
A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have relatively similar product needs. All people and all organizations within a given segment have some similar characteristics and needs.
The process of dividing a market into meaningful segments or groups that are relatively similar and identifiable is called market segmentation. The purpose of segmentation is to enable the marketer to tailor marketing mixes to better meet the needs of one or more specific segments.
Market segmentation is important to the well-being of most companies for the following reasons:
| · | Segmentation enables marketers to identify groups of customers with similar needs and to analyze characteristics and buying behavior of those groups. |
| · | Segmentation provides marketers with information to help them design marketing mixes specifically matched with characteristics and desires of one or more segments. |
| · | Segmentation helps decision makers more accurately define marketing objectives and allocate resources. |
| · | Market segmentation helps marketers define customers needs and wants more precisely. |
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