Market Segmentation

Market segmentation is a marketing term referred to the aggregation of consumers having similar needs, wants, desires, likes or demands into various groups, which we refer to as segments. The objective of market segmentation is to derive a strategy for the company to give the consumers in a segment the complete value and services of a product different from the competition. This helps the company to deliver customer service as good as the expectations of the consumer or better. Market segmentation helps companies save a lot of money; using the segmentation the companies do not waste money on providing services, promotions, offers and advertisements to non-potential customers rather spending the same amount on potential customers increases the customer satisfaction, brand value, goodwill of the company and increases word of mouth advertisement to potential   customers.
The key considerations involved in market segmentation:-
  1.) Defining right segment involved
When a company considers implementing market segmentation in the company it should define the segment perfectly. A company with multiple products shall research its products and divide them into segments in a right manner.   This helps the company to serve the customers who fall in that segment in a much effective manner. A company might have one or more product or services in the same segment. Eg. If nike considers market segmentation, it must define a perfect segment in shoes like basket ball shoes segment. Nike making a segment which consists of running and basketball shoes will prove to be ineffective segmentation.
  2.) Identifying the characteristics of the segment

  * Geographic
The company divides the market into segments based on the geographic location of the consumers. It can be divided into nations, states, regions, cities, neighbourhood and even busy commercial places. Based on this the company can serve the customers according to the demands of them locally.
  * Demographic
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