Bases For Segmenting Consumer Markets

The four major segmentation variables in consumer markets include:

Geographic Segmentation

It is one of the earliest and still most commonly used methods of segmentation. It involves dividing markets into different geographical units such as countries, regions, states, cities or neighborhoods. Few or all of these are chosen by the marketers as areas of operation. For instance, Japanese automobile makers produce different versions of auto for American and European markets.

"American spec" is different from "European spec". Nokia is currently designing rugged and easy to navigate mobile phones for illiterate populations in rural India, working closely within the peculiarities of these rural communities.

Steps Involved In Market Segmentation

Market segmentation involves four steps:

• Identifying product-related need Sets.
• Grouping customers with similar need sets.
• Describing each group.
• Selecting an attractive segment(s) to serve.

Product-Related Need Sets

Organizations approach market segmentation with a set of current and potential capabilities. These capabilities may be a reputation, an existing product, a technology, or some other skill set. The first task of the firm is to identify need sets that the organization is capable (or could become capable) of meeting.

Understanding Market Segmentation

Perhaps the most important marketing decision a firm makes is the selection of one or more market segments on which to focus. A market segment is a portion of larger market whose needs differ somewhat from the larger market.

Since a market segment has unique needs, a firm that develops a total product focused solely on the needs of that segment will be able to meet the segment's desires better than a firm whose produce or service attempts to meet the needs of multiple segments.

Market Management Organization

Many companies sell their products to many different markets. Dell sells its products to consumer, business, and government markets. Steel companies sell their steel to the railroad, construction, and public utility industries. When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable. 

A market manager supervises several market managers (also called market- development managers, market specialists, or industry specialists). The market managers draw on functional services as needed. Market managers of important markets might even have functional specialists reporting to them.

Types of Marketing Organization

Marketing department can be organized using several variables/bases as discussed in this post. They include;


Functional Organization
The functional form of organization is the simplest and most bureaucratic design.
At the SBU level, managers of each functional department, such as production or marketing, report to the general manager. Within the marketing department, managers of specific marketing activity areas, such as sales, advertising, or marketing research, report to the marketing vice president or director.

At each level the top manager coordinates the activities of all the functional areas reporting to him or her, often with heavy reliance on standard rules and operating procedures. This is the most centralized and formalized organization form and relies primarily on hierarchical mechanisms for resolving conflicts across functional areas. Also, because top managers perform their coordination activities across all product-markets in the SBU, there is little specialization by product or customer type.

Meaning of Marketing Organization

Weihrich and Koontz (1994) observe that organization is a word many people use loosely. But it implies a formalized intentional structure of roles or positions. Fifield and Gilligan (2000) believe that the way in which an organization develops and implements its plans is inexorably linked to its structure and managerial culture and determine organizational efficiency and effectiveness. Boyd et al (2002) explain that successful implementation of a given strategy is more likely when the business has the functional competencies demanded by its strategy and supports them with substantial resources relative to competitors; is organized suitably for its technical, market, and competitive environment; and has developed appropriate mechanisms for coordinating efforts and resolving conflicts across functional departments.