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Benefits of Market Segmentation

Market segmentation provides several key benefits: 1) It enables companies to identify market opportunities by studying customer needs and satisfaction levels in different segments. 2) It allows sellers to tailor their marketing appeals, programs, and budgets to better satisfy the needs of specific segments. 3) Segmenting the market helps companies design products that precisely match the demands of their target audiences.

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Meenakshi Anil
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65 views

Benefits of Market Segmentation

Market segmentation provides several key benefits: 1) It enables companies to identify market opportunities by studying customer needs and satisfaction levels in different segments. 2) It allows sellers to tailor their marketing appeals, programs, and budgets to better satisfy the needs of specific segments. 3) Segmenting the market helps companies design products that precisely match the demands of their target audiences.

Uploaded by

Meenakshi Anil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Market Segmentation Benefits

1. Determining market opportunities:


Market segmentation enables to identify market opportunities. The marketer can study the needs
of each segment in the light of current offerings by the competitors. From such study, the
marketer can find out the current satisfaction of customers. Segments with low level of
satisfaction from present offering may represent excellent market opportunities. For example,
customers may not be satisfied with the current offering of water purifiers in terms of product or
after-sale service. Such situation enables a marketer to launch a new range of water purifiers and
market them well.

2. Adjustments in marketing appeals:


Sellers can make best possible adjustments of their product and marketing appeals. Instead of
one marketing programme aimed to draw in all potential buyers, sellers can create separate
marketing programmes designed to satisfy the needs of different customers. Proper advertising
and sales promotional appeals can be made depending on the target audience.

3. Developing marketing programmes:


Companies can develop marketing programmes and budgets based on a clearer idea of the
response characteristics of specific market segments. They can budget funds to different
segments depending on their buying response.

4. Designing a product:
Market segmentation helps in designing products that really match the demands of the target
audience. Products with high market potential can be designed and directed to meet the
satisfaction of the target market.

5. Media selection:
It helps in selection of advertising media more intelligently and in allocating funds to various
media. The funds are allocated to various media depending on the target audience, impact of the
media, competitor advertising, and so on.
6. Timing of marketing efforts:
It helps in setting the timings of the promotional efforts so that more emphasis is placed during
those periods when response is likely to be at its peak. For instance, consumer goods can be
heavily advertised to Christians during Christmas season and to Hindus during Diwali time.

7. Efficient use of resources:


By tailoring marketing programme to individual market segments, management can do a better
marketing job and make more efficient use of the marketing resources. For example, a small firm
can effectively use its limited resources – money, sales force, etc. – in one or two segmented
markets rather than unsuccessfully aiming at a wider market.

8. Better service to customers:


Market segmentation enables a company to concentrate its marketing efforts in a particular
market area, thereby, providing a better service to the target customers. Proper marketing
segmentation can facilitate customer satisfaction.

9. Helps in fixing prices:


The marketing segmentation also enables to fix prices of the goods and services. Since different
market segments have different price perceptions, it is necessary to adopt different pricing
strategies for the markets. For instance, the prices for lower-income groups have to be lower and
the product and promotional efforts are adjusted accordingly.

10. Assist in distribution strategies:


Segmentation also assists in adopting suitable distribution strategies. Different market segments
may require different distribution mix. For example, if the product is of very high quality
intended to target the upper class, then it must be distributed at prestigious outlets located at
selective places.

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