PRINCIPLES OF MARKETING Coursework Example | Topics and Well Written Essays - 2750 words

PRINCIPLES OF MARKETING - Coursework Example These aspects govern greater significance in the wake of the large scale competition which has emerged after globalisation where firm are trying to expand their reach beyond geographical boundaries. Customers come with a varied range of needs and wants. Products come in different categories and for customer’s having different preferences. Hence it becomes important for firms to segregate customers so as to effectively target them and prepare customised products for target markets. This can only be achieved if a firm follows an effective segmentation, targeting and positioning strategy. Segmentation is defined as â€Å"the process of splitting customer, or potential customers in a market into different groups, or in segments† (Mc Donald & Dunbar, 2007, p.34). Segmentation helps in segregating customers into groups so that the firm can prepare customised products that cater to the needs of specific segments. Segmentation segregates customer based on different characteristics which enables firms to cater to the needs of different individuals. Segmentation can be done in different ways which may be based on demographics, geography, marketing channels or products and services. Different firms segregate their customer on different basis depending on the product offering. The success of a segmentation strategy depends upon the following factors. Firstly, the segmentation strategy should cluster the market segment into a broad set of distinct customer groups. Mathematically, a customer segment must comprise of approximately 1.25 percent of the total volume of sales . Secondly firms must also look out for segments with a manageable size so as to effectively cater to the needs of the segment. Thirdly the constituents of a particular segment must display homogeneity i.e., they should have similar needs and wants and externally heterogeneous in nature which implies that the members of different segments must have different needs and wants. Fourthly the market