3.2. Segmentation and consumer behavior models
As an introduction, it is appropriate to recall the Pareto law (law 80: 20), according to which only 20% of buyers bring the firm 80% of income, representing a generalized group of target customers of the firm. On them, the firm also focuses its products ( target shooting ). This strategy of market activity seems more efficient. In fact, this is the segmentation of the market.
Market segmentation is the division of markets into distinct groups of buyers (market segments) that may require different products and to which different marketing efforts need to be applied.
Segment is a dedicated group of consumers responding identically to the same set of incentives. The main goal of segmentation is to ensure the targeting of marketing activities. As a result of segmentation, the main principle of marketing is realized: customer orientation.
The main arguments in favor of segmentation
1. There is a better understanding of not only the needs of consumers, but also of what they are (personal characteristics, behavior in the market, etc.).
2. A better understanding of the nature of competition in specific markets is provided. Based on the knowledge of these circumstances, it is easier to choose market segments for their development and determine what characteristics the products should possess in order to gain advantages in competition.
3. It is possible to concentrate limited resources on the most profitable directions of their use.
4. When developing marketing plans, the features of individual market segments are taken into account, resulting in a high degree of orientation of marketing tools to the requirements of specific market segments.
The first step in segmentation is selecting segmentation criteria. At the same time, it is necessary to distinguish between the criteria for segmentation of the markets for consumer goods, products for industrial purposes, services, etc.
Segmentation of the market is carried out by the following criteria:
o by consumers;
o by product;
o by competitors.
The criteria underlying the segmentation of the market must meet the following requirements:
o be measurable under normal market research conditions
o reflect the differentiation of consumers;
o identify differences in the structure of the market;
o promote the growth of the understanding of the market.
In marketing, the market means the totality of all potential consumers who are in need of products in a particular industry and have the opportunity to satisfy them.
Depending on the type of consumers, the following types of markets are distinguished: the consumer market and the organizations markets. The latter are divided into production and technical markets, resale markets and government markets. With such an abundance of markets, it is obvious that when segmenting the market, one must take into account certain features of it, take into account the uniqueness of products sold in different markets.
When segmenting the consumer market, the following criteria are used:
o behavioral, etc.
Industrial market segmentation criteria
The industrial market is the market of consumer organizations that purchase goods for further production and resale to other consumers. The criteria for segmentation of the industrial market can in principle be similar to the criteria for segmentation of the consumer market. Regional criteria should include the characteristics of the region where the consumer organizations are located. Demographic criteria may include the area of specialization, resources, existing contracts, past purchases, the size of orders, the characteristics of decision-makers. Lifestyle factors include the organization's way of functioning, brand loyalty, reasons for purchasing, social and psychological characteristics of employees. These parameters can form the basis for market segmentation.
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