what is market segmentation? What are the conditions that must be met for effective segmentation ?Discuss

 Market Segemtation : 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

1. clear identification of the segment,
2. measurability of its effective size,
3. its accessibility through promotional efforts, and
4. its appropriateness to the policies and resources of the company.

The four basic market segmentation-strategies are based on

1. behavioral,
2. demographic,
3. psychographic, and
4. geographical differences.

Effective market segmentation takes effort. It is not something that comes easily for any business. It requires a great deal of skilled research and effective implementation of segmentation strategies. Mindful monitoring of marketing strategy performance and adjustment to the segmentation system is also necessary to maintain the effectiveness of the strategies that have been employed.

The requirements for effective market segmentation are as follows:

a) Measurable: The size, needs, purchasing power, and characteristics of the customers in the segment should be measurable. Quantification should be possible.

b) Divisible: The segments should be differentiable. There must be clear-cut basis for dividing customers into meaningful homogeneous groups. They should respond differently to different marketing mixes. There should be differences in buyer's needs, characteristics and behaviour for dividing in groups.

c) Accessible: The segment should be reachable and serviceable. It should be accessible through existing marketing institutions, such as distribution channels, advertising media and sales force. There should be middlemen to distribute the products.

d) Substantial: The segment should be substantial. It should be large enough in terms of customers and profit potential. IT should justify the costs of developing a separate marketing mix.

e) Actionable: It should be actionable for marketing purposes. Organizations should be able to design and implement the marketing mix to serve the chosen segment.