Market consists of buyers, and the buyers are different to each other in one or more ways. They may vary in their needs, locations, resources, buying practices and buying attitude. Market segmentation is to divide a market into smaller groups of buyers according to their different needs, behaviors or characteristics. Through market segmentation, companies divide large and heterogeneous markets into small segments. With these smaller segmentations, products and services can be reached more efficiently and effectively to the target market.
There are many ways to segment the market but all ways are not effective. For example, consumers of table salt could be divided into blonde and dark hair customers. But, hair color does not influence the purchase of table salt. Effective market segments must have some requirements to make the segmentation more efficient. These are:
Segments should be easily measurable after targeting. The size, profiles and purchasing power of the segments can be measured. Sometimes, segmentation variables are difficult to measure. For example, if any company wants to launch any product which is useful for left-handed people. In America, there are more than 3 million people are left-handed, which is somehow equal to the entire population of Canada. So, if they target their market towards left-handed segment, then the major problem may be that it will be difficult to identify and measure.
Markets segments should be effectively reached and served to the targeted market. Marketers have to make their products accessible for customers. Suppose, a fragrance company gets that heavy users of one of its brand are single men and women who stay out late and socialize a lot. Unless this group shops from company’s outlets, its members will be difficult to identify.
The market segments should be large or profitable to serve. Segments should be huge possible homogeneous groups worth pursuing with an altered marketing program. For example, it would not pay to automobiles manufactures, if they manufacture cars especially for those customers whose heights are more than 6.5 feet.
The segments are conceptually visible and respond differently to different marketing mix elements and plan. For example, if married and non-married women react similarly to a sale of particular brand of perfume, they do not count as separate segment.
Effective plans can be designed for serving and attracting the segments. For example, even though, one small airline identifies seven market segments, airlines’ staff is too small to design separate marketing plan for each segment.
So, these are some requirements to make segmentation effective and efficient. Correct identification and measurement of segmentation can be beneficial for marketers and their brand and products.