Market segmentation entails defining different categories of consumers according to their needs. Marketers segment markets so that they can satisfy the actual needs of the consumers. As global markets continue to expand marketers are becoming aware of the need to categorize their customers depending on their specific needs and differentiating products to improve customer satisfaction as well as increase the market share (Tyagi & Kumar, 2004).
The major segmenting variables for consumers are the geographical location of the consumers, income group of different people in the market, social class, age group, and gender among others. Each consumer group has unique needs and marketers should apply unique marketing strategies to satisfy the needs of the customers in such markets (Tyagi & Kumar, 2004).
Geographical location is used to segment people by identifying the needs of people in different countries and regions. This helps satisfy the actual needs of people from different regions. Age group segmentation is applied where different people from different age categories exist in the market. As such, children, adolescents, middle-aged and old people are identified and products are delivered according to their needs. In different communities there exist social classes which are mostly determined by the income level of each people. The social class determines the kind of products to be consumed as well as the price attached to the products (Tyagi & Kumar, 2004).
To determine which company to enter, companies identify their strengths and weaknesses in satisfying the needs of the consumers in a specific market. The level of competition also determines whether a company should penetrate a particular market or not. The resources available to a company are a major determine used to determine whether to enter a particular market or not. The nature of the market also determines which market to enter or not. Markets with a high growth potential are viable and marketers should target them (Pride & Ferrell, 2010).
Market targeting is the initial step applied when penetrating a particular market. Marketers identify particular groups of consumers to sell their products. The characteristics of the needs of the consumer’s group which have been targeted are then developed so that the products can be manufactured to match these needs.
Companies use different strategies to enter a particular market. The strategies applied to depend on the size of the market, competition level, government, and legal restrictions put in place among other factors. Marketers penetrate a market by creating awareness about the existence of the products in the market to capture the attention of potential customers. Active market penetration is required to create a large consumer base (Pride & Ferrell, 2010).
After penetrating the target market, companies position their products in a strategic position so that they can capture as many customers as possible. The market position helps customers identify particular brands in the market so that they can develop the need to use the products.
Market positioning is very important because it determines the number of customers willing to buy products from a new company in the market. Retaining the new and existing customers is very important to ensure that there are enough customers for the company. Proper customer retention also helps have consumer loyalty for a company (Pride & Ferrell, 2010).
List of references
Pride, W. M. and Ferrell, O. C. Foundations of Marketing. Mason; Cengage Learning, 2010.
Tyagi, C. L. and Kumar, A. Consumer Behavior. New-Delhi, Atlantic Publishers & Dist, 2004.