Market Segmentation

 


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The most important reason for bringing in the marketing concept is to place the customer needs at the centre of organisations decision making. The need to adopt this approach stems from a number of factors, including increased competition, better-informed and-educated customers and, most importantly, changing patterns of demand. Basically it is this change in patterns of demand that has given rise to the need to segment markets. Market segmentation can be defined as the process of breaking down the total market for a product or service into distinct sub-groups or segments where each segment may conceivably represent a separate target market to be reached with a distinctive marketing mix. Effective segmentation is achieved when customers sharing similar patterns of demand are grouped together and where each group or segment differs in the pattern of demand from other segments in the market.

Segmentation Bases:

a) Geographic Segmentation consists of dividing a country into regions. If the company is bigger then, these larger regions are then broken down into areas with individual regional manager controlling salespeople in distinct areas. In international marketing, different countries may be deemed to constitute different market segments. With the hair care products geographic segmentation is quite important.

b) Demographic Segmentation is done on the basis of various factors like age, sex, income and social class, education, nationality, political, family size and family life cycle. This is quite important for hair care products because different types of people like different types of products at different stage of their life.

c) Behavioural Segmentation takes into account the behavioural pattern of the buyer. Buyers generally have a constant buying habits. They generally buy the same or the similar product and this can be used as the base of segmentation. Such base include usage status, "light", “medium" and “heavy users", Brand loyalty status, where customer can be divided depending on their loyalty to a product or a brand, Benefits sought, that determines the principal expectation(s) that a purchaser is seeking from the product and occasions for purchase.

d) Life Style or Psychographics segmentation is based on the idea that individuals have characteristic patterns of living that may be reflected in the products and brands which they purchase.

This company producing hair care products can segment itself in all different ways discussed above just by slightly modifying the product for different target segments or market.

Price can be used to support the position of the range of hair care products.

Price is very important part of the marketing mix. The four P’s , Price, Product , Promotion and Place are the four wheels of effective marketing. All four of these components are quite essential for the successful marketing. Among these the price takes the priority. Pricing is quite important for Survival, maximizing profit, maximizing market share, maximum market skimming, product quality leadership. Determining demand, price sensitivity.

It is the price that motivates the consumers to buy a particular product mostly in the case of price sensitive products. Similarly price perceives the quality. It is the assumption that cheap products are not good in quality and vice versa. So price can help in positioning the product in a desired market. Because of the various range of hair care products being produced different price can be set for different range. This will help to position the product in the market and create an image in the mind of the consumer regarding the quality of the product.

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