Explain the concept of market segmentation and discuss its benefits as an alternative to a mass marketing approach.
“Market segmentation is the division of a market into different groups of customers with distinctly similar needs and product or services requirements.” (Smith, 1956) With a market segmentation, the whole market will be divided into different segments. In the consumer market, it is usually divided into 3 criteria, which are the behavioural, psychological and profile. (Adapted from marketing, 2011, P.213) In the essay, it is going to discuss 2 main benefits while using the market segmentation as an alternative to a mass marketing approach.
First, companies can keep more and a wide range of customers, also to understand customers’ lifestyle, wants and needs for the further productions (Riley , 2012) . Customer can be divided into different group by different criteria such as age, gender and place of living. Different customer in different criteria may have different needs on their targeted products. By providing goods in different criteria, customers will retain in the same companies and prevent the occurrence of shifting patrons to competing brands because it can fulfill their needs. Coca-Cola Company has fully applied with this benefit. “First Coke is introduced in 1886.”, “After a decade, Diet Coke was introduced in 1982. Within a year, Diet Coke becomes the largest selling low calorie soft drink in America.”(Coca-Cola, 2013). Health caring has become an apprehension of customers in 1990s. Coca-Cola Company realized that heir their sales figure would decrease because of the high sugar content in Coke. In order to gain back customers, they introduced the Diet Coke which has less sugar content .Its targeted group of people are those who want to keep fit but at the same time they like Coke a lot. Diet Coke became a popular at that time and its popularity last until now. This help Coca-Cola Company continue...