A Practical Guide to Market Segmentation

Suppliers want steady orders and prompt payment, they also want to feel valued by the company that they supply.

many of them put this approach aside when it comes to managing their customers . Once the product is sold,

Bargaining Power of Suppliers: A producing industry requires raw materials - labour, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. Tesco maintains direct professional business relationships with all their suppliers of organic food and non-food product worldwide. They also conduct supplier viewpoint surveys to find out what their suppliers think of Tesco.

According to Horner and Swarbrooke (2005: 39), Segmentation may be defined as the process of dividing a whole market into subgroups or segments for marketing management purposes. Market segmentation is the division of the overall market for a service into various categories with common characteristics. In response to different segments, organisations facilitate the available resources to achieve greater efficiency, in order to satisfy specific needs of customers.

The segmentation has been done on the basis of buying behavior of the customers. Knowledge of segment buying behavior can help redirect marketing resources for profit gain.

As every customer has unique needs and expectations towards certain products, the ultimate goal of market segmentation is to organize customers into groups which allows targeting of customers with similar needs of and response to the products. The key is to minimize differentiation within each segment

Additionally, awareness about how the supplier under question compares with the peers is an important success factor for a fruitful relationship. You should be able to address questions like - is this supplier secure than others in their industry? Does this vendor have proven and reliable performance? How responsive is the supplier for addressing known security vulnerabilities? Use such information to better negotiate contract terms with your suppliers and set higher standards for what you expect for security performance in a third-party relationship.

The power of suppliers is also analyzed and the relationship between the buyers and suppliers is determined. Managers can create strategies to reduce the cost of suppliers and create an efficient supply chain by this analysis.

Segmentation brings benefits not only to the marketer, but to the customer as well. When segmentation attains higher levels of sophistication and perfection, customers and companies can conveniently settle down with each other, as at such a stage, they can safely rely on each other’s discrimination. The firm can anticipate the wants of the customers and the customers can anticipate the capabilities of the firm.

In today’s global economy, organizations are faced with a variety of changes in the business environment. The selection of competent suppliers has long been regarded as one of the most important functions to be performed by a purchasing department.

Customers from various existing markets differ from what they needs and wants, behaviors, and locations. With market segmentation, organizations are able to divide the large number of market to smaller and specified segments, thus it can be approached more effective and efficient with the targeted products that are matched to their particular demands (Kotler, 2010).

Segmentation is a method that divide and separate market into a few segments according to the similar and identical needs, wants, and preferences. Through segmentation, marketers can be more easily to arget the customers and achieve their profit.

Most of the companies use a model named Predictable Model that helps them to know as to which customer is likely to stay and which ones are probably one timers. The model is created after careful study and scrutiny of the sales records and the result is a score that provides the company with an idea in regards to the solvency of the customers. This leads to the companies focusing more on the customers that are not regular and entice them to stay.

The main aim of market segmentation is to isolate markets into groups comprised of homogeneous characters and heterogeneous between segments based on a particular set of variables. Marketing practitioners and academics have adopted and implemented the topic of market segmentation with a lot of enthusiasm. The main advantage of this method has been to yield a higher understanding of a given market, advanced technique, and approaches used in forecasting consumer behavior, and enhance the ability to recognize and take advantage of developing new markets. Market segmentation enables the destination marketers to divide markets into particular groups of buyers, or potential customers who have constant changes in taste and preferences. The segmentation helps with influencing consumer demands through marketing targeting a particular segment. The millennial segment is the fastest growing group in the travel industry. In a this paper, we focus on how best to market Toronto to millennial segment based on their travel preferences. Their ability to use technology to marketplaces they visit makes them the best group to use in advertising unique features of Toronto.

Segmentation is important because after that we willit will enable us to define see what kind of strategies could be used to identify and target customers to to achieve a marketing plan objective and create differentiation strategies, involving specific products or product lines depending on the specific demand and attributes of the target segment.