Market Segmentation and Product Positioning

In: Business and Management

Submitted By al518206
Words 1605
Pages 7
Market Segmentation and Product Positioning

Market segmentation is the identification of portions of the market that are different from one
another. Segmentation allows the firm to better satisfy the needs of its potential customer.
Market segmentation also involves dividing a particular market into groups of individual
markets with similar wants and needs. Market segmentation can allow a company to identify
groups of similar consumers or potential consumers. It can allow a company to pin point
different types of consumer behavior in regards to particular products of that company. Due to
market segmentation, the company will be able to respond with appropriate marketing strategies
that satisfy the different preferences of each chosen segment. Market segmentation can be used
in different markets, such as industrial markets and consumer markets. According to
NetMBA.com, industrial markets commonly use market segmentation to segment their different
markets according to “1.) Location 2.) Company type and 3.) Behavioral characteristics”
(www.netmba.com). In relation as to why industrial markets would use location as a segment
would be due to shipping factors for the vendor. It is important for vendors for companies to be
geographically positioned near the customers due to “shipping costs may be a purchase factor for
vendor selection for products having a high bulk to value ratio” (www.netmba.com). Industrial
markets would use company type in the process of market segmentation in the fact that “business
customers can be classified according to 1.) Company size 2.), Industry 3.), Decision making
unit and 4.) Purchase criteria” (www.netmba.com). Lastly, industrial markets use a method of
looking at the behavioral characteristics in the process of segmenting its markets. Companies in
the industrial market will follow…...

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