Name: Nahid Fatema Priam

Id: 21-91924-1
Section: A , MBA

Market segmentation is a process of dividing a heterogeneous market into relatively more

homogenous segments based on certain parameters like geographic, demographic,
psychographic, and behavioral.
Segmentation shouldn’t be done for segmentation seeks. Segmentation must be useful and
effective. There are many ways to segment a market. But not all segmentation are effective. For
example, buyers of salt can’t be segmented. Furthermore, if all salt buyers bought the same
amount of salt each month, believed that all salt is the same, and wanted to pay the same price,
the company would not benefit from segmenting this market.
To be effective segmentations must fulfill the following requirements:

1.Measurability: The degree to which the size, needs, purchasing power, and characteristics of
the customers in the segment should be measured. For example , if British American Tobacco do
a survey on smokers they will commonly ask – if the person currently smoke on a daily basis or
not, How many cigarettes a day do he smoke, any brand preferences , How old were he when he
tried a cigarette.

If they do the survey on teenager smokers they mightn’t get the correct results. So they need to
do the survey on adult smokers and old age smokers.

2. Accessibility: The market segments must be effectively reached and served Unless the target
group lives or shops at certain places and is exposed to certain media, they will difficult to reach.
It should be accessible through existing marketing institutions, such as distribution channels,
advertising media, and sales force.

3. Substantiality: The segment should be substantial. The degree to which the segments are
large enough and profitable enough in terms of customers and profit potential. A segment should
be the largest possible homogeneous group worth pursuing with a tailored marketing program.
The segment should hit or cross the breakeven point. The breakeven point is the level of
production at which the costs of production equal the revenues for a product. In investing, the
breakeven point is said to be achieved when the market price of an asset is the same as its
original cost. The segment should hit or cross breakeven point. Each firm have minimum
requirements for the financial return from their investment in a market, so it is necessary to hit or
cross the breakeven point.

4. Actionability: Effective programs can be designed for attracting and serving the segments. It
should be actionable for marketing purposes. Organizations should be able to design and
implement the marketing mix to serve the chosen segment.