Contents

• Introduction 4
• Segmentation 5
• Customers’ Perspective of Segmentation 8
• Effective Segmentation 12
• Ineffective Segmentation 14
• Undifferentiated Marketing 16
• Differentiated Marketing 16
• Market Segments 17
• Segmenting Markets 19
• Market Strategy 20
• Factors of segmentation: 22
• Consumer Market Segmentation 22
• Industrial or Corporate Market Segmentation 24
• Market Needs of a Business Customer 25
• Segmentation based on Needs 26
• Market Segmentation –Literature Review 45
• Strategic Market Segmentation 50
• Dimensions of Marketing Segmentation 53
• Objectives and objects of segmentation 54
• Market Segmentation of Retail Industry – A Case Study 56
• Amazon UK 56
• Analysis and Recommendations 58
• Conclusion 59
• References 62

Description

Market segmentation is about dividing a market into different homogeneous groups of consumers. Market segmentation makes it possible for organizations to customize the marketing mix for specific target markets rather than offer the generic marketing mix to vastly different customers, in order to satisfy customer needs. Marketing segmentation is not about having a completely different marketing mix for each of the market segments. Promotional campaigns too differ among segments as 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, durable and substantial enough to be profitable, A market can be segmented based on multiple actors. Business markets are segmented differently from consumer markets as the purchasing behaviors of both are different. The purpose of segmenting the market is to allow the marketing programs to focus on specific subsets of prospective buyers that are most likely to purchase the products or services. If segmentation is done in an effective way it will result in the highest possible returns for the marketing expenses. Depending on whether the company is selling its products or services to individual consumers or businesses, there would be distinct characteristics among segments in what the company considers when defining market segments. Marketing segmentation also enables brands to customize their products and services to match the needs of different consumer groups. Segmentation of the market has the advantages of being able to target and cater to customers that have similar consumption patterns. At the same time too much of segmentation might be efforts intensive and could result in loss of focus on the overall market scenario. Furthermore, too much of segmentation can result in increased costs, which may not justify the earnings from individual segments. Amazon UK is one of the most successful retail firms. It combines two channels successfully, retailing and online business. While it implements segmentation into its marketing efforts, this study reveals that the approach of Amazon UK to consumer market is over segmented. This paper recommends Amazon UK to minimize on its segmentation efforts and benefit from increased profits and reduced costs.