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Market Segmentation

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Market Segmentation
Muhammad Khalid
SUNY Empire State College

What is Market Segmentation? The concept of market segmentation is quite simple. Common sense would dictate that every product, good, or service is not applicable to every potential consumer in both the national and global market. Different demographics categorize products differently. The idea of segmentation is to organize sub-markets with in the mass-market, evaluating which sub-market have a greater potential to buy the respective product or service. After research and testing, this market(s) is (are) known as the target market. The target market is quite simple to understand. It is simply the market or markets which maintain the potential for the most profitability for the firm or company. One question someone might ask is why choose to select a niche market as opposed to just targeting the mass market? The answer is simple: Marketing is expensive. Researching which demographic will best respond to the respective service or product ensures the company will only be exhausting resources where the potential for return in greatest. At the same time, markets where scope of success is limited will not consume valuable time, energy, money, brainpower, and overall company resources.
How do Companies Segment Markets? The initial step to this process is to delineate the firm’s current situation. The role of this is to allow the company to evaluate its own standing prior to that of the markets. Here, strategies, goals, and expectations for the company and marketing team specifically are established. The second step determining consumer needs and wants. This step is not just a step of segmentation, but is often the first research done generally when introducing a new company, product, or program. It questions what consumers need (either generally or specific to existing products). New technology,

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