Advantages of Market Segmentation

Less money lost advertising to everybody rather that just to one specific segment.

You can charge more for your product or service, because it is exactly what this specific segment requires.

It may be the only product of this type on the market therefore there is no competition.

The customers are all satisfied, because the get the product they want.

They can make a more specific product for their target market and therefore can make it more expensive to buy.

Ensuring product is sold in appropriate places, appropriate promotions are offered.

Explain the benefits to an organisation of using market segmentation.

They can increase profit potential by keeping costs down and not targeting unwanted customers. They can get ahead of the competition in specific parts of the market They can target their marketing towards customers who are most likely to buy their products.

They can improve the service which the offer to the customer. They can identify their most valuable and least valuable customers.

By doing market segmentation, it splits up the market into different groups with similar interests and it targets the market that you aim to. This in turn saves money for the company because they don't target customers that are not interested. This gains more profit for the company as they are not targeting the wrong customers.

Market segmentation also makes the company more competitive with other companies and also improves your position in the market as it shows that the company is strong.

1. Measurable: - it should be possible to determine the values of the variable used for the segmentation.

2. Relevant: - it should justify the expected profits and the growth potential.

3. Accessible: - the target customers must be reachable and servable for the organisation.