The Importance of Market Segmentation Essay Example | Topics and Well Written Essays - 1500 words

The Importance of Market part - Essay ExampleIts a financial situation where if your denote is all over the place, without proper focus, you will spend much more money in areas you where you dont need to. It affects the return in enthronization (ROI) negatively. The reason why anyone is in business is to make money and reduce losses on all levels (Boone, Kurtz 1999, p. 229). There are two types of products in merchandising consumer products that the general public buy, and business products which are created for the needs of new(prenominal) businesses. A good example would be a company that buys rubber to create tires. Tires shadower be purchased for the family car (consumer) or tires hatful be purchased by a car manufacturing plant to put on their automobiles (business). The marketing will be different for both groups with the first group getting literature that says what a great ride one will experience while driving with these tires. That is business to consumer marketing. The other group produces literature which outlines all the technical details such as available tire sizes, rubber density, tread patterns, testing results and other statistical selective information that most consumers could care less about. This type of literature is business to business marketing ((Boone, Kurtz 1999, p. 229). ... Four common bases in segmentation are geographic, demographic, psychographic and product-related groupings. The next whole step is the strategic issue of which segment should be selected, and the following conditions should be met One where the maximum differential in competitive strategy can be genuine Capable of being isolated out so competitive advantage is preserved Must be valid even though imitated (Jain, 1997, p. 117). Geographic Segmentation Geographic segmentation deals with location of population most interested and likely to purchase a certain product or service because of where they live. Much of this can be determined through census and j ob growth data over several year or decades to view qualified patterns that match the criteria for the marketing direction of a product or service (Boone, Kurtz 1999, p. 232). The United States government currently classifies urban data using three specific categories the Metropolitan statistical force field (MSA) which is a freestanding central urban area of 50,000 or more in population, with 100,000 in total MSA the Consolidated Metropolitan Statistical Area (CMSA) which incorporates the largest cities in the U.S. and must include two or more MSA and the Primary Metropolitan Statistical Area (PMSA) which covers urban counties with social and economic ties to CMSAs. Other factors in geographical segmentation are climate, local food habits, and also determining where competitors are located and how they will affect the market plan. The Geographic Information outline (GIS) as one can find on Google Maps, is one example of finding where your competitors are (Boone, Kurtz 1999, p. 23 4). Demographic Segmentation The study of demographics relates to age, sex, income, education, occupation, household size, all of which