Question

List and briefly explain the 4 main elements we use in Marketing to carry out a Market Segmentation

Answer 1

Market segmentation is the division of an entire market group based on consumers with similar market needs. The marketing of a men's clothing line may be based on advertising during football games. But when manufacturers discover that a large percentage of the product is actually purchased by a wife, girlfriend or mother, a new segment requiring its own separate marketing is identified.

Measurable

Measurability is an important element of market segmentation. Though a new segment is identified, without knowing just how many potential consumers it encompasses, it may not be worth the risk. Commercial advertising, changes in product placement and jumbling price points all come with a price tag to the marketer. If the amount of consumers, and the potential purchasing power of those consumers, cannot be measured, the marketer cannot accurately create a marketing budget to target the segment.

Accessible

For a market segment to be valid, it must be accessible as a marketing target. In other words, if a manufacturer identifies a potential new market segment, it must determine a means to advertise to that market. If the segment cannot be targeted successfully through commercials, direct mail, radio ads, newspapers or the other means typically used by the marketer, creating a new advertising campaign for this segment is not a financially sound adventure. But if the segment can be reached by creating new advertising and selling the product in a different location, it becomes a worthwhile prospect.

Different

A market segment is defined as having a different response to the marketing mix elements, also known as the four P's. A target market group will be identified based on reactions to the product itself, the price point given, the promotion or advertising methods for the product and where it is sold, or its placement. When a group of consumers inside that market expresses different demands for the product, it morphs into its own segment. There is a huge demand for cell phones, but teenagers and adults have different demands for the product. These two segments will react differently to a commercial for a cell phone, the price of the phone and how it is sold. The manufacturer of the phone will devise separate marketing strategies to reach each of the segments.

Profitability

Defining and targeting a new market segment is the first step toward creating a potential niche market. But before expending time, energy and money into attempting to capture this new segment, run some test questions. How durable is this market segment and is it large enough to garner a profit? Back-to-school products may have a short advertising life span, but the amount of consumers that can be captured in that time make it a potentially profitable venture.