Question

Market segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segments created are composed of consumers who will respond similarly to marketing strategies and who share traits such as similar interests, needs, or locations.

Discuss the major variables used by organisations when segmenting markets and the significance of the use of market segmentation as a marketing tool.

Answer 1

Answer) Following are the major variables used by the organization

• Age-A part of demographic segmentation,it is used in order to introduce products based on generation.
• Income-Again a part of dempgraphic segmentation in order to target price based products to different clients
• Area based segmentation-Also known as geographic segmentation,it is used to target products/services to people based on a particular region they live in,for example if someone lives in cold region of country,warm clothes will be marketed there.
• Based on customer's past actions-Also known as behavioural segmentation,idea is to segment customer on basis of how they acted in past such as which good they purchased or how much they spent etc.
• Finally companies can also use psychographic segmentation or segmentation based on perceptions of consumers,what they believe in as that helps company to customize products.

Marketing segmentation is one of the most important marketing tool as it helps company customize products based on segments,use marketing strategies based on segmentation along with right communication,it also helps company ready itself for future based on trends it see during segmentation and thus this tool holds significant amount of importance.

Answer is complete.Thank you!