They are in fact targeting segments which have no need of bargaining or negotiation. Your email address will not be published. For instance if one segment fails then the other segment(s) will contribute positively for the other segments as well. thanks guys you are helping me a lot .What are the disadvantages of market segmentation? For example, outlets who sell lottery tickets in disadvantaged neighborhoods can come under fire for the appearance of taking advantage of desperate people with a promise of riches that isn’t likely to come true. Thus market segmentation also increases competitiveness of a firm from a holistic view. A well and up to date research leads to successful advertising. Chould you Please sir simple points send me. Really helped me with my GCSE course work. (ii) With the help of knowledge about different segments, the marketer can better allocate the total marketing budget. Etiquette: Meaning, Types, Benefits and Basic Rules. Segmenting markets offer tremendous advantages to companies and marketing firms. Hence it due to market segmentation that mobile manufacturer will have the whole rural population for expansion of its business as compared to another manufacturer which is producing only high cost mobiles. Thus a watch is available for any customer who enters a Titan showroom, whatever be his age. Numerous automobile companies have started focusing on small car segments. I love writing about the latest in marketing & advertising. Advantages and Disadvantages of Concentrated Marketing Advantages. Market segments are groups with clear and distinct needs and characteristics relative to the larger market. If that segment is saturated with companies marketing to it, choosing that target market could hinder your sales rather than help them. From fast track to Sonata and the high range watches, Titan has them by price segment as well as life cycle segment. Concept & Advantages Explained With Example. Some businesses receive criticism for targeting certain market segments. Market segmentation is a commonly used process in marketing to define and create distinct market segments from a larger target market, according to Business Dictionary. There would be several questions asked by you –. Market segmentation also spreads the risk of a company across the segments. Privacy Policy 8. Prediction of the likely response from each segment is possible. Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Thus, many differing segments exist in a market. However, they are heterogeneous between segments. In my other articles on segmentation, i have emphasized on the advantages of segmentation in deciding the Marketing mix of a company. Messages delivered to people not in a given segment have little business benefit and wastes money. Let’s examine the advantages and disadvantages of segmenting the market or niching marketing. You cannot expand in a territory when you have no idea of which segment of customers you will be meeting. Target marketing means selecting a market segment and directing your marketing efforts toward that segment. Segmenting markets offer tremendous advantages to companies and marketing firms. The first and foremost disadvantage of market segmentation is about the wrong selection of a segment, so if the company chooses wrong market segment which is too small or irrelevant for the business of the company then the company will not be able to sell its product. If you have better focus, obviously you will have better business. This shows why communication needs segmentation. In this approach one marketing mix is developed for instance, in the watch market, Rolex watches concentrated on luxury segment. (vii) Appropriate service packages can be developed for each market segment. When a firm attempts to serve several market segments, there is a proliferation of products. The ones you exclude could offer you many sales, maybe even more sales, than the one you chose. Remain aware of this potential disadvantage when you focus on a target market, and be prepared to change your tactics if you find you need more sales. The brand loyalty will definitely increase. Is there any use talking to him about politics? How to Use a Windows XP System Recovery Disc, Difference Between Marketing Strategies and Sales Strategies. 2. Advantages Disadvantages of Market Segmentation, University of Maryland University College: Ethical Implications Of Target Market Selection, Relationship Between Market Research and Market Segmentation, How Place, Price, Promotion & Product Can Affect the Elasticity of a Product, Privacy Notice/Your California Privacy Rights. (iii) Promotion and distribution expenditures increase when separate programme are used for different market segments. (iii) The marketer can modify his product/service and marketing appeals to suit the target segment. Imagine that you became a teacher one day. The target market you choose may not be large enough to support your business. Are Salespeople Part of a Marketing Budget? What timing are the classes? What is the subject i will be teaching? Kokemuller has additional professional experience in marketing, retail and small business. If you have your market strategy on the basis of geography, then once you are catering to a particular territory, you can immediately expand to a nearby territory. The same dilemma is faced by companies. As undifferentiated marketing strategies put all their metaphorical eggs in one proverbial basket, they are inherently vulnerable to changes in the marketing environment. The benefits of segmentation and advantages of segmentation are the same. He can examine the needs of each segment and determine to what extent the current offering satisfies these needs. 2. Multi-segment marketing is a departure from the tradition of finding a target market and dedicating your small business to serving it. Thanks for sharing the significant information. All rights reserved. Even major players like Bata have erred in market segmentation. It is possible to distinguish one customer group from another. TOS 7. Promotional expenses, costs of keeping adequate inventory of each variety of goods etc., also go up, eroding profitability. The article lists the 6 advantages … In the same way, if you are targeting customers based on their demography (Ex –  reebok targets fitness enthusiasts) then you can expand in similar products (Ex –  reebok expanding with its fitness range of clothes and accessories). (v) Management can identify new profitable segments which deserve special attention. Or if you are targeting a particular segment, you can change the marketing mix as required in that particular segment. Marketers segment the market and try to fulfill the needs of that segment. Market segmentation can also result in over segmentation where individuals are excluded making it difficult to assess the profitability of the market. Copyright 10. Consumers are not a homogeneous lot. For example if a computer manufacturer is selling computers to different markets, and if it wants to retain students segment then it can devise the strategy where it offers free internet access for 1 year to students purchasing computers from them, or if wants to retain business class then it may offer free printer or scanner with computers so that they do not go anywhere. Some advantages of mass marketing include reaching a large audience and the potential for massive sales, but some disadvantages of mass marketing are overexposure and increased competition. Since the marketer has to implement varying marketing programmes suiting to the different segments, administrative expenses increase. Nobody can sell to everybody. what is the concept of group dynamic and how does it work? I agree that it is crucial not to target customers as a homogeneous group. Advantages of Segmenting the Market / Niche Marketing 1. The company then targets several market segments … Mass marketing decreases along with the development of differentiated marketing. Nice.. …. Segmentation is an effective method to increase the focus of a firm on market segments. The quality of research decides how much the brand will succeed, also it the prominent deciding factor of the brand accomplishments. Similar problems could arise for a business selling firearms in a notoriously violent neighborhood. With homogeneous responses from each segment, marketer finds it easy to develop an appropriate marketing programme. That tightly defined target market could guide all marketing decisions, from message to advertising outlets. Differences in customer response to different marketing tools serve as the basis for deciding on the allocation of market funds to different customer groups. He has been a college marketing professor since 2004. These companies cannot expand after a certain level and need a concentrated efforts for a … It helps the marketer concentrate on the fulfillment of the well defined needs of the specific segment.

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