Customer Segmentation – A Technique for Effective Marketing...

Customer Segmentation – A Technique for Effective Marketing Customer segmentation is also known as market segmentation. It is the practical division of potential customers in a given market into discrete groups. The division is based on customers having similar appearing needs and buying characteristics so that a common market approach can be used by an organization for the marketing of its products to them in a competitive and economical manner. Also when the organization plans for expansion, then executing a marketing strategy without any knowledge of how the target market is segmented is similar to firing shots at a target blindfolded. In such case the likelihood of hitting the target is a matter of luck more than anything else. Without a deep understanding of how best the current customers of the organization are segmented, the organization often lacks the market focus needed to allocate and spend its precious human and capital resources efficiently. Furthermore, a lack of best current customer segment focus can cause diffused go-to-market and product development strategies that hamper the ability of the organization to fully engage with its target segments. All of these factors when combine together, can ultimately obstruct the growth of the organization. All markets are heterogeneous and all the customers are not the same. The different customers have got different needs. Also customers’ behaviours towards a product vary based on their requirements as well as on the environment in which they are working. Hence marketing strategy of ‘one size that fits all’ does not work in present day situation. Therefore, effective marketing strategies requires a segmentation of the market into smaller and homogeneous customers’ segments, the understanding of needs and wants of these segments, the design of the products and services to meet these needs, and development of...