Contents

• Introduction 4
• Market Segmentation 5
• Market Segmentation- A Customer’s Perspective 8
• Effective Segmentation 11
• Ineffective Segmentation 13
• Undifferentiated Marketing 14
• Segmented Marketing 15
• Bases of Market Segmentation 15
• An Approach to Segmenting Markets 17
• Market Strategy 19
• Bases of Segmentation: 20
• Consumer Market Segmentation 21
• Business Market Segmentation 23
• Market Needs of a Business Customer 24
• Segmentation based on Needs 25
• Purchase Decisions 33
• Market Segmentation –Literature Review 36
• Strategic Market Segmentation 42
• Dimensions of Marketing Segmentation 45
• Objectives and objects of segmentation 46
• Market Segmentation of Retail Industry 48
• W H Smith Plc 48
• Analysis and Recommendations 50
• Conclusion 51
• References 54

Description

Marketing efforts require identification of consumers with similar consuming patterns and customizing the products and promotional offers to suit them. In other words, efficient marketing efforts call for grouping of customers based on their needs and buying behavior. This grouping of customers with similar characteristics of consumption and purchase is called segmentation. Market segmentation is about grouping of customers in a market into different homogeneous clusters. Market segmentation enables organizations to customize the marketing mix for specific target markets rather than offering the generic marketing mix to vastly different customers to satisfy customer needs. Marketing segmentation is not about having a completely exclusive marketing mix for each of the market segments. If segmentation is done in an efficient way it will result in the increased returns as compared to the marketing costs. Depending on whether the organization is selling its products or services to individual consumers or business customers, there would be distinct characteristics among segments when defining market segments. Marketing segmentation also enables companies and brands to customize their products and services to match the needs of different consumer clusters. Segmentation of the market has the advantage of being able to target and cater to customers groups who have similar consumption patterns. At the same time excess of segmentation could be efforts intensive and could result in loss of focus on the overall market scenario. Promotional campaigns vary among segments as the needs of each segment would be different. A market segment has to be measurable, accessible by communication channels and needs to be different in its response to marketing mix, needs to be durable and substantial enough to be profitable. A market can be segmented based on several factors. Business markets are segmented quite differently from consumer markets as the purchasing behaviors of both the segments are different. The purpose of segmenting the market is to allow the marketing programs and efforts to focus on specific subsets of prospective customers that are most likely to purchase the products or services. Furthermore, too much of segmentation can call for increased costs, which may not justify the earnings from the individual segments. W H Smith is one of the oldest and most successful retail firms of the UK. It has been having brick and mortar stores for a century and recently it has entered into the online business. It combines both the forms of marketing successfully.. While it implements segmentation into its marketing efforts to some extent, this study reveals that the approach of W H Smith to consumer market is under segmented. This paper recommends W H Smith to increase the degree of segmentation and benefit from increased profits and reduced costs.