Chapter 7, Problem 1QA

Summary Introduction

To ascertain: The concept of market segmentation along with its importance and the concept of market fragmentation along with its consequences for marketers.

Introduction:

Market segmentation:It is defined as a process where the marketers divide the customer group into various segments that share important characteristics.

Market fragmentation: It is defined as creation of a number of consumer groups due to difference in the needs and wants of the people in today’s modern society.

Explanation of Solution

In today's marketplace; market segmentation and target marketing are considered as important strategies because of market fragmentation- that is, the splitting/grouping of a mass society into different groups due to cultural and technological differences. Thus, marketers must determine if they can better satisfy customers with a mass-marketing strategy or target marketing based on strategy efficiency and effectiveness.

Market segmentation helps the marketers to define and better understand the ideal customers and target audiences. So, this allows the marketers to identify the right market for their products and then the marketing strategy could be handled more effectively.

Importance of market segmentation is as follows:

1. Target markets: it helps to identify the potential market.

2. Understanding the market

3. Marketing mix- it becomes easy to develop a marketing mix base dupon the different needs and wants of the market.

4.Competitive position: it becomes easy to compete.

5. Generating new opportunities

6.Avoids mass marketing

Market fragmentation:

Due to the technological and cultural advancements it’s a complex task to understand the differing needs of the society this create a condition known as market fragmentation. This means that people with different backgrounds and interests naturally divide themselves into a number of groups with different needs and wants. Because of this diversity in the taste and preference, the same good or service will not be liked by everyone.

Consequences of market fragmentation for marketers are as follows:

1. Reduce the effectiveness of mass marketing techniques-Marketers should balance the efficiency of mass marketing when they give the same items to every consumer, with the effectiveness that comes when the marketers offers every person exactly what he or she desire/wants. the consumer’sfeel the best strategy is that the marketers offer the perfect product just for them.
2. Reduces brand loyalty.