BGN Entrepreneur

A market segment refers to a subgroup of people or organizations, who are sharing one or more characteristics that cause them to have similar needs for product or service. Different segments have different needs. A true market segment meets all of the following criteria: it is distinct from other segments; it is homogeneous within the segment that it responds similarly to a given marketing mix comprising a given product or service, sold at a given price, and distributed and promoted in a certain way. All segments fall into either consumer or industrial markets, though small segments are often called as niche markets or specialty markets.
Market segmentation refers to the process of classifying a market into distinct segments. The segmentation process consists of segment identification, segment characterization, segment evaluation and target segment selection. Generally speaking, markets can be divided according to a number of general criteria, like by industry or public versus private sector. Usually, segmentation is conducted via demographic, geographic, attitudinal or behavioral data. The process of segmentation is distinct from targeting, which refers to choosing which segments to address, and positioning, which refers to designing an appropriate marketing mix for each segment. The overall goal is to identify groups of people with similar needs; to prioritize the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Right segmentation can lead to significantly improved advertising results and increased customer satisfaction.
Revenues can be improved as a result of the improved marketing effectiveness.

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