hLLp//LuLor2uneL/buslness/markeLlng/segmenLaLlon_whyasp

market segmentat|on why segment markets?

1here are several lmporLanL reasons why buslnesses should aLLempL Lo segmenL Lhelr markeLs carefully
1hese are summarlsed below

8etter match|ng of customer needs
CusLomer needs dlffer CreaLlng separaLe offers for each segmenL makes sense and provldes cusLomers
wlLh a beLLer soluLlon
Lnhanced prof|ts for bus|ness
CusLomers have dlfferenL dlsposable lncome 1hey are Lherefore dlfferenL ln how senslLlve Lhey are Lo
prlce 8y segmenLlng markeLs buslnesses can ralse average prlces and subsequenLly enhance proflLs
8etter opportun|t|es for growth
MarkeL segmenLaLlon can bulld sales lor example cusLomers can be encouraged Lo Lradeup afLer
belng lnLroduced Lo a parLlcular producL wlLh an lnLroducLory lowerprlced producL
keta|n more customers
CusLomer clrcumsLances change for example Lhey grow older form famllles change [obs or geL
promoLed change Lhelr buylng paLLerns 8y markeLlng producLs LhaL appeal Lo cusLomers aL dlfferenL
sLages of Lhelr llfe (llfecycle) a buslness can reLaln cusLomers who mlghL oLherwlse swlLch Lo
compeLlng producLs and brands
1arget market|ng commun|cat|ons
8uslnesses need Lo dellver Lhelr markeLlng message Lo a relevanL cusLomer audlence lf Lhe LargeL
markeL ls Loo broad Lhere ls a sLrong rlsk LhaL (1) Lhe key cusLomers are mlssed and (2) Lhe cosL of
communlcaLlng Lo cusLomers becomes Loo hlgh / unproflLable 8y segmenLlng markeLs Lhe LargeL
cusLomer can be reached more ofLen and aL lower cosL
Ga|n share of the market segment
unless a buslness has a sLrong or leadlng share of a markeL lL ls unllkely Lo be maxlmlslng lLs
proflLablllLy Mlnor brands suffer from lack of scale economles ln producLlon and markeLlng pressures
from dlsLrlbuLors and llmlLed space on Lhe shelves 1hrough careful segmenLaLlon and LargeLlng
buslnesses can ofLen achleve compeLlLlve producLlon and markeLlng cosLs and become Lhe preferred
cholce of cusLomers and dlsLrlbuLors ln oLher words segmenLaLlon offers Lhe opporLunlLy for smaller
flrms Lo compeLe wlLh blgger ones