The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle.
Four basic factors that affect market segmentation are
- clear identification of the segment,
- measurability of its effective size,
- its accessibility through promotional efforts, and
- its appropriateness to the policies and resources of the company.
The four basic market segmentation-strategies are based on
- behavioral,
- demographic,
- psychographic, and
- geographical differences.
Use 'market segmentation' in a Sentence
I was doing my best to identify my target market, as an entrepreneur, and then I realized it was optimal if I engage in market segmentation.
Using market segmentation, the stationery company was able to determine that there was very little publicity directed toward women over 50 years old, and was able to adjust their marketing strategy accordingly.
It is very important fora large company such as Apple to use market segmentation in order to properly define the profits garnered from their many products.
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