A market is defined as individuals, organizations with purchasing power, and desire/ willingness to purchase.
Markets can be categorized based on the buyers as follows:
Producers market trade in raw material, equipment, supplies, machines etc.
Reseller market trade in finished goods, services from producers
Consumer market: refers to market where end consumer buys the products for personal or household use. Consumer market can be bifurcated into durables and non-durables markets. The non-durable products are also known as fast moving consumer goods.
The principal means of classification are:
- Primary demand or selective demand advertising,
- Direct or indirect action advertising, and
- Institutional advertising.
Markets comprise of heterogeneous segments of consumers. Market segmentation refers to process of identifying a group of buyers with similar buying desires and requirements. The marketeer with a distinct marketing mix targets each segment.
Companies, whether they are big or small experience a similar challenge. In such a confused situation, ‘Segmentation’ comes in handy! Segmentation is defined as the process of dividing a market into distinct sub-sets of consumers with common needs or characteristics and selecting one or more segments to target.
Segmentation is the first step in a marketing strategy. Once marketers divide the market into various groups, they can then select their ‘targeted segments’ and design products that suit their requirements. For instance, companies like BPL have resorted to market segmentation as a strategy to beat its competitors. Its products like: BPL Loewe (digital designer televisions for the premium-end of the market); Matrix Flatscreen TV (for technology lovers); Studioline (who are performance seekers); and Prima (for the lower-end of the market) are a case in point. Each of them has been designed to cater to the requirement of a particular segment.