Explain the levels of Market Segmentation and outline the Importance/ Need / Benefits of Market Segmentation or Target Marketing.

Mass marketing can work but not always and not in most of the markets. Maruti Suzuki offered it Maruti 800 model for quite a few years in India as part of its Mass Market strategy. It is cost effective marketing as the firm doesn’t need to create offering tailored to different needs in the market. The firm starts losing business by the entry of competitors that offer a product which meets the needs in a better way,

Organisations follow market segmentation strategy to better serve the needs of the market. Market segmentation has the following levels that are practised basis the market opportunity and Business objectives.

1) Segment marketing – Organisations target one or more segments within a market. Each target market is offered a different marketing program. This strategy is referred to as Segmentation Strategy. Buyers with similar buying characteristics and needs are grouped together. Basis the organisations strengths, competitive advantage, and objectives, the firm can venture into a single segment or more. Instead of a single offering for the entire market, a firm offers products based on the different segment requirements.

For example, certain mobile phone offerings by Motorola target students (Moto G series) with budget smart phone that serves the needs of Internet usage, music player, camera, etc. at a low price by reducing the internal memory, low power chipset, etc. Similarly, for its customers who wish premium looks and top class performance, it offers models like Moto X, Moto Style with premium looks, and powerful hardware and software built. Similarly, Canon offers cameras for learners, amateurs as well as professionals

2) Niche Marketing – It involves even a more selected group of customers. It is dividing a segment into sub segments. The customers are ready to pay a premium to satisfy their needs. For example, many Jewellery makers create custom based designed unique to the demand and need of the customer. Similarly, Blackberry launched its Porsche model to target top management corporate customers.

3) Micro Marketing – It involves catering to needs and wants of the local or individual customer. The firms offer and create products as per the needs of an individual. These offerings are known as Custom Based Products. For example, there are firms that create custom based products with an individual’s initials or name imprinted on the product. These are the offerings mostly for the rich like movie stars, etc. For example, various well known fashion designers like Giorgio Armani, Manish Malhotra, Sabyasachi etc. create products exclusively for their clients. Citibank offers different mixes in its branches in different locations. Other example of local marketing would be offering Subscription TV channels, Magazines or Newspapers as per the needs in the locality. The neighbourhood with high population of certain geography can have TV channels in their language.

Importance/ Need / Benefits of Market Segmentation or Target Marketing.
1) Helps identifying the right product for the market. Identifying the differences among customers and targeting a particular group helps a marketer to focus on various marketing strategies for that group. It is easier to satisfy certain customers rather than satisfying the entire market. It helps identify the reasons why customers buy or do not buy certain products.It enables organisations in understanding how best to serve the market.

2) Helps marketer in identifying market opportunities. Discovering the target market with no product or a product with specific features gives opportunity for marketers to serve and conquer the market.

3) Brings efficiency and effectiveness in marketing functions. The marketing functions are well aligned with the segment selected, and the organisations departments concentrate on the marketing objectives of the target market. The resources of the organisation are allocated effectively.

4) Helps divide the market and gain market share. Through segmentation marketers divide the market into groups by studying the differences and makes a product meeting the needs of that group. This results in high sales as the product features align with the needs. The marketing program designed for the target market helps gaining market share. This gives the firm a competitive advantage.

5) Helps gain competitive advantage. It helps in assessing the competitor products while doing the segment research. A product from competitor can have high sales in one segment but not in another. This gives an opportunity for the organisation to produce and market a product better that the competitor in that segment. Eventually, the organisations can launch product in other segments as well.

6) Benefits the organisation as well as the customer. All the marketing efforts result in creating a right product for the consumer at the right price. The organisations also focus on making the product availability top priority to gain and maintain market share.

It benefits the customer by meeting his needs, reasonable priced, easy availability, proper after sales service, detailed information available about the product before making a purchase, improves standard of living, lot of other benefits or services offered by organisations to create loyal customers.