Market segmentation (business perspective) is identifying a group of people having similar liking for a particular product or a service based on their interest. There can be multiple segments as different group of people have different needs.
Importance of Market segmentation
The significance of segmentation are not tough to understand but challenging part is to arrive at the most effective groupings. In consumer markets, segmentation is almost always according to consumer need. It helps answer some of the concerns raised by service providers.
For example:
- What are the differences among different targets?
- Who is the my most profitable customer among them?
- What did this segment of consumers like most in this product?
- What are the most important geographic markets for my campaign?
- Which age group of people use this service most?
If service providers focus on catering to consumers based on various market segments identified, this will help improve their products and service on a long run.
Key Benefits
Some of the advantages of performing market segmentation are:
- Helps target the right audience and cater to their needs – hence achieve customer satisfaction
- Makes it economical for marketers by focusing on the right group before launching a campaign
- Saves time by identifying the target audience
- Improves ROI for service providers
It is well known fact that, goal of very business organization is to achieve customer satisfaction and hence increase their revenues. Therefore, to know your consumer behavior and understand their attitudinal pattern is very important, Hence market segmentation plays a very important role in market research which helps understand consumer requirements.
