Xacc/280 Week 1 Data Segmentation

According to Horner and Swarbrooke (2005: 39), Segmentation may be defined as the process of dividing a whole market into subgroups or segments for marketing management purposes. Market segmentation is the division of the overall market for a service into various categories with common characteristics. In response to different segments, organisations facilitate the available resources to achieve greater efficiency, in order to satisfy specific needs of customers.

In the business-to-consumer (B2C) market, this kind of segmentation is often quite hard to undertake because the obvious differences among customers—age, income, geography, and so on—usually don’t correspond to their preferences for, say, shampoos, books, or even clothing. To solve this problem, consumer goods companies have developed elaborate statistical mechanisms, such as dual-objective segmentation.1 But because these complicated algorithms are not typically used by business-to-business (B2B) suppliers, those companies divide their world by weak identifiers such as size and geography. The good news is that B2B companies don’t necessarily need to use elaborate and sophisticated methods; only a large consumer goods customer base— often comprising millions of individuals—demands them. In many B2B markets, 25, 15, or even just 10 customers

The segmentation has been done on the basis of buying behavior of the customers. Knowledge of segment buying behavior can help redirect marketing resources for profit gain.

They also understand who is the most powerful group in their business so that they can work on reaching their needs and with these information it was possible to work out the segmentation options.

If the retailer were able to obtain purchasing information for individual costumers, several new approaches could be utilized to increase the effectiveness of its marketing and strategic plans. Finch (2012) explains that market segmentation is the important process “of dividing the total market into distinct groups or submarkets based on similar wants, needs, behaviors, or other characteristics” (P. 1-1). In creating segment

Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior

Segmentation consists on dividing the market into distinct group reflecting different target with homogeneous needs, characteristic or behavior (Armstrong and Kotler, 2005). Before opting for a segmentation strategy it is crucial to consider the attractiveness of the segment, its homogeneity and stability, as well as the accessibility of the target group.

As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment

The first part of the process is segmentation “The purpose of market segmentation is to identify relatively homogeneous groups of consumers with similar consumption patterns” (Pervez &Cateora 2014.) segmentation is the application of grouping the customers into segments which may have the same common needs or that will respond similarly to a marketing activity. It is the ability to recognise the consumers which exist that have different needs. For example do the consumers prefer speed and performance or do the customers prefer safety and quality.

Segmentation is a tool; purpose is to choose target market.Segmentation comes prior to target market Many different tasks are involved other than segmentation when choosing target market Look at each segment on its own as an individual marketing opportunity. Potential worth of each segment To examine whether the whole market should be chosen or only few segments To find segments which are less satisfied in market from competitor brand.

Behavioral segmentation are particular behaviors based on the customer’s interests such as loyalty, customer’s interests and values. According to Perreault, Cannon & McCarthy (2015), “specific behaviors wary a great deal for different people, products, and purchase

Some of the ways that businesses can build loyalty would be by offering loyalty programs, Interacting with customers, surveys, creating institutional ties, and personalized marketing. Another way to build loyalty is to treat your employees so well that they treat your customers well. If you have happy employees they will treat your customers happy. “The link between satisfaction and loyalty however is not proportional” (Kotler, Keller, 2009, p71), so businesses must

Segmentation is important because after that we willit will enable us to define see what kind of strategies could be used to identify and target customers to to achieve a marketing plan objective and create differentiation strategies, involving specific products or product lines depending on the specific demand and attributes of the target segment.

Segmentation and list management-cover areas such as data mining, segmentation of customer and other information.

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. Its important as it allow a business to precisely reach a consumer with specific needs and wants. There are several thing of market segmentation such as demographic segmentation, geographic segmentation, psychographic segmentation.