Review of literature

This review of the literature presents, concerning the concept and practice of market
segmentation. This key strategy is essential to the development of a strategic plan for a brand.
It is a decision-making tool for the marketing manager in the crucial tasks of selecting a
target market for a given product and designing an appropriate marketing mix.
The uses of this technique are discussed, together with the procedures for segmenting
markets. Possible bases for segmenting consumer markets are reviewed in detail. The more
straightforward objective bases have been briefly outlined whereas the more complex
subjective behavioral bases are discussed in more depth. The requirements for segmentation
to be effective are noted and some criticisms of the technique presented.
Market segmentation has long been "considered one of the most fundamental concepts of
modern marketing" (Wind 1978). Sheth (1967) has described it as "essential to marketing".
According to the definition found in the Oxford English Dictionary "to segment" is to "divide
into parts". In marketing terms these parts can either refer to groups of consumers with
similar requirements or to groups of goods or services with similar attributes. The term and
concept of "market segmentation" have been attributed to Wendell R. Smith, in a paper first
published in 1956. Smith 1956 commented "Segmentation is based upon developments on
the demand side of the market and represents a rational and more precise adjustment of
product and marketing effort to consumer or user requirements. In the language of the
economist, segmentation is disaggregative in its effects and tends to bring about recognition
of several demand schedules where only one was recognized before". In a brief
"Retrospective Note on Market Segmentation" published in the introduction to the special
edition of the J ournal of Marketing Research edited by Wind, Smith (1978, p. 316) asserts
that "the roots of early market segmentation research, carried on almost a quarter of a century
ago, can be found in the writings of a group of marketing practitioners and scholars whose
undisputed leader was the late Wroe Alderson".
Baker (1984) considers the "concept of market segmentation rests upon recognition of a
differentiated demand for a product, while its use as a marketing tool depends upon
identification of the most appropriate variable or variables with which to subdivide total
demand into economically viable segments. Economically viable segment may be understood
as being of sufficient size to enable a marketer to earn an adequate profit by catering to the
specific needs of its members. In fact Haley (1968) considers that "the idea that all markets
can profitably be segmented has now received almost as widespread acceptance as the
marketing concept itself".
Howard and Sheth (1969) have noted market segmentation depends on the idea that "the
company should segment or divide the market in such a way as to achieve sets of buyers".
These sets of buyers, or sub segments of the market, would then become targets for the
company's marketing plans. The potential methods of subdividing total markets must be
validated by research. It is then the responsibility of management to devise marketing mixes
which are effective in the market segments. Thus market segmentation has as its aim the
identification and delineation of market segments with a view to providing more efficient and
satisfactory marketing service. "The strategy of market segmentation recognizes that people
differ in their tastes, needs, attitudes, motivations, life-styles, family size and composition
etc." (Chisnall 1985).
The concept of market segmentation has only been recognized recently. Historically sellers
engaged in mass marketing. That is they mass produced, mass distributed, and mass promote!
One product to all consumers in an attempt to obtain economies of scale. In the face of the
competition inevitably generated by this approach producers sought to obtain a differential
advantage through making their products or services different from those of competitors. This
product differentiation strategy is "designed to offer variety to buyers rather than to appeal to
different segments"
Statement of problem:
Problem discovery is the first step of any decision process and it is the main objective of
marketing research. Identification of problem is one of the objectives of the research.
Some target markets have not been reached. There are some gaps in market segment. The
gaps may be the customers’ needs and wants may not be fulfilled according to their demand.
There might be gaps between the demand and supply of the products of JK Tyre. Due to
problem of segmentation, the product is not extremely valuable. Also, there might be some of
the service gaps in the target market for JK Tyre.
The character and personality of humans are very dynamic and subject to the external
environment. The external environment is itself very unpredictable. Therefore, there is
constant change in consumer situations and conditions. This leads to problems arising in
already established segmentation techniques, which were created at one point of time in this
changing market.
In spite of offering a quality product, JK Tyres Company facing the problem of competition
and in improving market share.
The company is facing severe competition and lack of promotional activities in reaching
target. So, it has to study the consumer buying decision by segmenting the markets and
requirement of those segments.
It needs identification of hindrance in serving target market. A thorough and careful study of
the market segment is the need of the research.

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