Discussion on Market Segmentation


Demonstrated understanding with substantive, analytical insights, given your position taken in response to the
question. Do not merely regurgitate concepts from the text.
Application of relevant, important Business To Business marketing concepts, constructs, theories and themes
to the analysis. Business To Business marketing concepts/theories used in the essay analysis must be based
on material taken from the unit’s prescribed textbook being: Hutt, M. and Speh, TW 2014, Business marketing
management: B2B, EMEA edition,1 st  ed, Cengage Learning. Application of concepts/theories, however, does
not equate with mere recital or definitions of the concepts and theories.
As stated in the marking grid, good quality secondary research based on a range of sources like scholarly
journals, business magazines, books etc. is required to support your position in response to the essay topic.
Analysis, explanation and discussion that are company and industry specific [where relevant].
A focused and structured approach in presentation of analysis, critique and application of concepts.





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In this paper, discussion regarding segmentation strategy has been made. Macro and Micro-Segmentation dimension have been mentioned. Factors that are to be considered while selecting the segmentation strategy has also been mentioned in this paper.
Market segmentation 
It is an art which enables the organization and marketer to classify and analyze the potential customer in the market. It enables the market to segment their potential customer on the basis of some common characteristics. It helps in making the marketing strategy. The organization uses to segment their market because it will lead the organization to better understand the trend of the customer and it will also help in targeting the customer. Proper segmentation helps the organization to formulate the further policies and procedure to market their product to their potential customer (Liu et al., 2018).
Two basic of market segmentation 
Macro segmentation- Macro segmentation mainly focuses on the elements such as the location of the market, size of the market, and organizational structure. Macro segmentation includes geographic location, customer type, customer size, and product use.
Micro-segmentation- Micro-segmentation mainly focuses on dividing the market into two small groups. It is also known as precise segmentation. Micro-segmentation is done based on the factors including behavior and lifestyle. Micro-segmentation includes purchasing strategy, purchasing criteria, personal characteristics etc. (Cross et al., 2015).  
Many markets are using two-stage approach segmentation as it leads to dividing the whole market into small, precise group according to the customer’s behavior and lifestyle. So here exact customer can be determined and projected. Which leads to serve in the best manner.
Pioneer in business methodology frequently prescribe a two-phase way to deal with business advertising division.
Identification of important large-scale fragments that is macro segments.
Classification of full-scale sections into miniaturized scale portions that is macro segments into micro-segments.
Many firms and organization used to follow single stage or phase segmentation approach using macro dimensions meanwhile some other firms or organization uses both micro and macro dimensions. So there are some specific factors which are responsible for the variance in the approach or application of the stage segmentation approach in the business activities 9 Venter et al., 2015). 
So as a marketing manager, the manager should consider various factors while making the decision to choose the segmentation approach. So some factors which is to be considered by the marketing manager while selecting the segmentation approach are as follows.
Consumer behavior and factors influencing their buying decision- Behavior of the customer and their perception should be considered. As it was found that customer who is living in the different region or different geographical locations have different behavior and have different buying decision-making skills.
A customer at the different location has different criteria for their choice. So single stage segmentation approach can be applied or marketer may use the more complex two-stage segmentation approach.
Consumer needs- Consumer needs play a vital role in making the successful segmentation. Basic of the segmentation is to identify the needs of the consumer. The client or consumer may have a less unpredictable arrangement of desires and needs while it might likewise have radical and hidden needs. So as per this single or two-phase division is chosen.
Type of the business- Type of the business also play a vital role in making the successful segmentation. A marketer can select segregation approach based on the type of the business and size of the market and its location (Varasteh et al., 2015).
In light of the sort of the business the market can be beneficial just on the premise of area and size. In the event that the business offers product and services which requires the top to bottom market knowledge and investigation of an outer condition, the two-phase division is utilized. Generally, single stage is utilized that is marketer may use the single stage segmentation approach too.
Markets dynamics- In making the successful segmentation, market dynamic plays a crucial role. Market dynamics like the uniqueness of the product and services, level of the competitiveness, awareness of the consumer regarding market offerings and so on determine the selection of segmentation approach like single or two-stage segmentation (Varasteh et al., 2015).
Examples- Market Segmentation tourism industry of Australia uses to target their customer through Demographic segmentation as it tries to attract the youth to visit Australia. By portraying Australia a place which is best for youth to come and enjoy. It targets its customer worldwide by alluring them by demonstrating that Australia nature is most appealing and the coastal lifestyle in Australia. So basically the Australian tourism industry segment their market through Demographic segmentation approach, that youth is the potential customer who can be served and targeted.
Profitability of segments- Marketer needs to analyses the profitability of the segmentation decision. If the marketer found that micro-segmentation is more profitable then he should use micro-segmentation to divide his market. Example- Johnson Company adopted two-stage segmentation approach in the US to target only the child. As initially, Johnson segmented its target customer as a child secondly it targeted its potential customer at US child to serve in the best manner. 
It just bodes well to put resources into a portion which is more productive. On the off chance that putting resources into large-scale division can give much preferable gainfulness over miniaturized scale portion, at that point single stage division is utilized.
Goals of the organization, company- If an organization needs to make customized understanding and incentive to the customer then it needs to pick very particularly segmentation approach that is highly specific market fragments, segments and pursue two-stage segmentation.




Single stage segment means that organization conducts the segmentation approach by analyzing that how many are using a smartphone in the particular region. This is called single segmentation approach. Whereas if organization again conduct segmentation and try to analyze that how many young generations are using a smartphone in that particular region and those who are willing to buy again the smartphone is known as two-stage segmentation approach (Rezaei, S., 2015).
Through using the segmentation approach organization uses to target their potential customer in the best manner. As proper segmentation will enable the organization to understand the in-depth preferences of the customer in the particular region which will lead the organization to better serve the potential customer.
Two-stage segmentation approach will be more beneficial for the organization. As if an organization or marketer is adopting the two-stage segmentation approach then marketer or organization can gain a stronger understanding of every segment of the market in the best manner. Through two-stage approach in-depth knowledge of the target market and potential customer can be gained. Which is very helpful for the marketer to provide the best survives to their potential customer.
Micro-segmentation uses to build trust- Small scale division is tied in with arranging your customer into more particular classifications. In typical segmentation, you may have customer sections in view of who lives in Denver, who has an occupation title of Vice President, or who is over the age of 50. A case of a micro-segmentation would be a fragment that incorporates each of the three—50+-year-old VPs who live in Denver.
So from the above example, it can be said that Micro Segment more focuses on the customer and try to build the trust of the customer.




In the end, it can be concluded that any organization is using only single stage segmentation approach to segment their market. Whereas many organization and marketer are using and adopting two stage macro dimension segmentation approach to better understand the nature and behavior of the potential customer and market. Two-stage segmentation approach will provide a better understanding of the market as well as the potential customer. Which will leads the marketer to provide the best services and product to the customer. 
While segmenting the customer or market a marketer need to consider various factors such as the type of the business, customer behavior, goals of the organization, market dynamics etc. as it will lead to having successful segmentation decision.
Liu, J., Liao, X., Huang, W. and Liao, X., 2018. Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega.
Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative perspective. Journal of Marketing Management, 31(1-2), pp.62-83.
Varasteh, H., Marzuki, A. and Rasoolimanesh, S.M., 2015. Factors affecting international students’ travel behavior. Journal of Vacation Marketing, 21(2), pp.131-149.
Rezaei, S., 2015. Segmenting consumer decision-making styles (CDMS) toward marketing practice: A partial least squares (PLS) path modeling approach. Journal of Retailing and Consumer Services, 22, pp.1-15.




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