SOLUTION
Segmentation:Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.
Need to incur time and money for segmentation:
A company cannot devise a market strategy without market segmentation. If they don’t do segmentation, they do not know whom they have to sell and what they have to sell. Thus without segmentation, target group is just a population and will never understand how can target them. That’s why there is need to incur time and money for segmentation.
If the product is of high quality then need of Segmentation
Quality is achieving or reaching for the highest standard as against being satisfied with the sloppy or fraudulent………… this is incomplete……..
Advantages of Segmentation:
1)Focus of the Company:
Segmentation is an effective method to increase the focus of a firm on market segments. If we have better focus, obviously we shall have better returns.
2)Increase in competitiveness
Naturally, once our focus increases, our competitiveness in that market segment will increase. Market share might increase and the chances of a new competitor entering might be low.
3)Customer retention
By using segmentation, Customer retention can be encouraged through the life cycle of a customer.
4)Have better communication
The communications of a company needs to be spot on for its TARGET market. Thus if there is need of a target market, there is also need of segmentation.
5)Increases profitability
Segmentation increases competitiveness, customer retention, and communications. Thus if it is affecting so many factors of your business, then definitely it affects the profitability of the firm.