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MARKET SEGMENTATION- Meaning
A market is a place where buyers and sellers can meet

to facilitate the exchange or transaction of goods and
services. Markets can be physical like a retail outlet, or
virtual like an e-retailer. Markets establish the prices of
goods and services that are determined by supply and
demand. Features of a market include the availability of
an arena, buyers and sellers, and a
commodity
Segmentation refers to a process of bifurcating or dividing a large unit

into various small units which have more or less similar or related
characteristics.
• Market segmentation is a marketing concept which divides the
complete market set up into smaller subsets comprising of consumers
with a similar taste, demand and preference. A market segment is a
small unit within a large market comprising of like-minded individuals.
One market segment is totally distinct from the other segment.
• In short, market segmentation means grouping of buyers who have
common characteristics as buyers who have common characteristics
as buyers of a product or services so that their needs are better
served.
• Definition of Market Segmentation:
• According to Cundiff & Still, “Market segments is the act of grouping
of consumers according to such characteristics as income, age, degree
of urbanization, race or either classification, geographical location or
education.
In the words of Philip Kotler & Gray Armstrong, “The process of
classifying customers into groups with different needs, characteristics
or behaviour is called market segmentation.
Objectives of Market
Segmentation
• According Prof. Esmond Pearce, “The purpose of market segmentation
is to determine the difference among the purchasers which may affect
the choice of market area or marketing methods.
• In other words, the main objective of market segmentation is to identify

the differences among the consumers of the product and to divide
those consumers, on the basis of the differences identified, into several
segments or groups to provide maximum satisfaction to consumers & to
earn maximum profits for the marketer.
Importance of Market
segmentation
1. Understanding the needs of the customer:
• When the information is collected segment-wise, the information becomes
more precise and clear and becomes easily and effectively usable. Decisions
made on this information. It helps the marketer to understand fully the
needs, behaviour and expectations of the consumers of different segments.
2. Better position to spot marketing opportunities:
• Market segmentation helps the producer to make fair estimate of
marketing opportunities. On the basis of market research involved I market
segmentation, the habits tastes, nature, etc. of consumers of different
markets can be understood deeply to harness marketing opportunities.
3. Allocation of marketing budget:
It is on the basis of market segmentation that marketing budget is
allocated for a particular region or locality. In the regions where the
sales opportunities are limited, a huge budget is of no use and budget
allocation will be limited. On the other hand, in the regions where
there are more sales opportunities, budget allocation will be more.
Thus, it will channelize money to more profitable segments of the
market.
4. Meeting of competition effectively:
• Market segmentation helps the producer to face the competitors effectively.
It provides an opportunity of making a deep study of the products, policies,
and strategies of competitors in all segments. This helps the producers to
adopt different policies, programmes, and strategies for different markets
taking into consideration competitor’s policies & programmes.
5. Choosing the advertising media:
• Market segmentation helps in choosing the advertising media wisely. It also
helps the firm in timing of advertising efforts so that they are more during
those periods when response is likely to be peak.
6. Increase in sales volume:
• Market segmentation helps the producer know the demand pattern
of each market segment, and satisfy the demand by improving his
product. As a result, there will be increase in sales volume. If the
market is properly segmented, the buyers preference are accurately
ascertained and all the market segments are properly served, the
sales volume will be much larger than if the same product is produced
and offered to all buyers.
8. Benefits to customers:
Market segmentation benefits the customers, as the producers
produces and supplies goods which serve customers interest and
satisfy their needs and wants
Bases of Marketing
Segmentation
1. DEMOGRAPHIC
SEGMENTATION
• Demographic segmentation refers to the categorization of the target
market based on specific variables like age, education, and gender. It
is a type of market segmentation that helps businesses to understand
their consumers better and meet their needs, effectively.
• Without demographic segmentation, it is nearly impossible to
understand what your customers want.

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MARKET SEGMENTATION- Meaning

A market is a place where buyers and sellers can meet

Segmentation refers to a process of bifurcating or dividing a large unit

• In other words, the main objective of market segmentation is to identify

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