| Market Segment |
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THE REQUIREMENTS FOR SUCCESSFUL SEGMENTATION ARE:
THE VARIABLES USED FOR SEGMENTATION INCLUDE:
When numerous Variable s are combined to give an in-depth understanding of a segment, this is referred to as depth segmentation. When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a ''' Buyer Profile '''. When the Profile is limited to demographic variables it is called a Demographic Profile (typically shortened to "a demographic"). A Statistical technique commonly used in determining a profile is Cluster Analysis . TOP-DOWN AND BOTTOM-UP software or a database of some kind. Profiles of existing customers are created and analysed. Various Demographic , Behaviour al, and Psychographic Pattern s are built up using techniques such as Cluster Analysis . This process is sometimes called Database Marketing or micro-marketing. Its use is most appropriate in highly fragmented markets. McKenna (1988) claims that this approach treats every customer as a "micromajority". Pine (1993) used the bottom-up approach in what he called "segment of one marketing". Through this process Mass Customization is possible. PRICE DISCRIMINATION Where a Monopoly exists, the price of a product is likely to be higher than in a competitive market and the quantity sold less, generating Monopoly Profit s for the seller. These profits can be increased further if the market can be segmented with different prices charged to different segments (referred to as Price Discrimination ), charging higher prices to those segments willing and able to pay more and charging less to those whose demand is price elastic. The price discriminator might need to create rate fences that will prevent members of a higher price segment from purchasing at the prices available to members of a lower price segment. This behaviour is rational on the part of the monopolist, but is often seen by Competition authorities as an abuse of a monopoly position, whether or not the monopoly itself is sanctioned. SEE ALSO
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