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Market Segmentation, Types, Benefits, Limitations and Qualities


We have learned Market and its Types. The market is large and wide we could say it is vast. Producers and manufacturers need to know which part of the market is beneficial for them so they could earn and grow as well they want to know which market has tough competition for them.
If we put it in simple words, market segmentation is nothing but dividing a market into small groups on the basis of different needs, behavior, and characteristics. Or, market segmentation is a marketing concept in which a market is divided into small groups of customers.
Different types of market segmentation are explained below
1.   Geographic Market Segmentation:  The market is divided on the basis of geographic characteristics like river area, fertile land area, unfertile land, etc. with the study of such geographic feature, the manufacturer can prepare his plans as which kind of product he can sell there, which product or service is suitable and needed in such geographic condition, which product or service he can provide in such geographic condition. For example, food, clothing is some products which are sold according to the geographic segmentation.

2.   Demographic Market Segmentation: This is a widely used segment; the majority of the product follows the demographic segmentation of product. In this segmentation, the characteristics of human being consider. Characteristics like age, gender, education, language, income, family size, religion, nationality, etc. are considered. For example, clothing, footwear, watches, glasses, etc., are a product which are made for everyone as per the need.

3.   Socio-Economics segmentation: This segmentation deals with the customers of different classes in society on the basis of 1. Income, 2. Cast, 3. Community, 4. Religion, 5. Culture, etc. Socio-Eco. Segmentation is a very important segmentation because it covers the whole society. It helps the producer to focus on certain types of customers in the society. For example, a car manufacturer will produce a car where high-income the group is there.

4.   Psychographic Segmentation: This segmentation is related to groups of people on psychological factors like personality, lifestyle, attitude, interest, motivation, thoughts, feelings, etc. for example High-class people like to show their richness through various expensive products i.e. car, air conditioner, big house, etc. so the manufacturer can focus on these people.

5.   Volume of purchase: This segmentation considers the size of goods and services purchased. For example, Product A is largely consumed/purchased in Area O but not in Area M so a producer can make some policies to sell goods at Area M also.


Benefits of Market Segmentation
         The market segmentation benefits both the manufacturer and consumer. These benefits are mention in the following chart.
MANUFACTURER

CONSUMER
1.   It helps to the manufacturer to prepare various marketing programs by understanding customers need and requirements. It makes an effective marketing program.

1.   It helps manufacturer to create an effective marketing program because of that a consumer get good marketing services.
2.   The the manufacturer can get a good knowledge of their competitors like their strength and weakness. He can handle great competition by providing extra features and offers to the consumer.

2.   With great competition in market consumer get extra services, good offers, quality product, and so many things within less price.
3.   Once manufacturer study their segmentation, he is able to make a proper allocation of available resources. He can channelize the resources as per requirements.

3.   Consumer gets Quality product within the required time and at the nearest place at affordable price.
4.   Good study of market segmentation helps to earn more profit as well as goodwill.

4.   Having quality products and services a Standard of living will increase in a positive manner.


5.   Get large employment opportunity.

Limitations of the Market segmentation
         Though market segmentation has lots of benefits it also has some limitations. These limitations are as follows,
1.   Increase in cost: Different products are sold in different segments so the cost of production also increases, also different segmentations require different advertisement and offers so the cost gets increasing.
2.   Increase in Inventory: in case of large segmentation, the total production is also large hence it requires large inventory or warehouse facility, which also ends in increasing of cost.
3.   Increase in managerial cost: To acquire a large area of the market the manufacturer has to make large employment which will handle large business activity properly. This employment will increase the managerial cost.
4.   Research and development: the manufacturer has to make some research and develop his product as per need. It takes some time and money.

 Qualities of good segmentation
         There is some basis on which we can say a segmentation made is effective or not. Such qualities of good segmentation are as follow,
1.   Measurable: it is most important that a producer must be able to define a segment properly by undertaking a various survey. The survey helps a producer to identify the size and importance of a segment to make future plans.
2.   Sufficient market potential: the size of the segment should sufficient and should include buyers who are able to buy a segmented product. The study should be done and conclude the potential of the segment.
3.   Segment should be economically measurable: a segment should be economically measurable so the producer can provide goods and services as per their financial condition. A producer can make some financial plans for its development.
4.   React uniquely: each segment should react uniquely to its problems. The segment should use different policy for different situations.
5.   Stability: With good policy and plans a segment should be stable and sustain longer. It should provide the best goods and services to the public to remain stable.
6.   Dynamic: With changing market condition the segment should change in the same way. It should be dynamic in nature.

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