The Applications Of Cluster Analysis

segmenting customer groups. The psychographic segment variables include people with similar personalities, values, and lifestyles. The last of the segmentation bases of the U.S. consumer markets would be behavioral segments. These are actions a person takes in purchasing and using products and services. Some of these segment variables include outlet type, direct, product features, usage rate, user status and awareness/intentions. Once the segmentation of the market is developed, the second step is to group products to be sold into categories. One can then develop a market-product grid and estimate the size of the markets. A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. 3 Steps four and five consist of using the segmentation will help to develop the target markets, which in turn will then lead to successful marketing actions. Successful segmentation depends on

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.

Market segmentation is a tool that can be used to define and demine different categories consumers can be grouped into in order for organizations to market to the group’s specific needs. It “is the process of grouping into clusters consumers who have similar wants or needs to which an organization can respond by tailoring one or more elements of the marketing mix” (Berkowitz, 2006, p. 164). Two specific types of Benefit Segmentation are Follower Segmentation and Health Seekers Segmentation. In Follower Segmentation, individuals want providers to will look out for their health care needs. They look to others for guidance

In order to market the product into the market successfully, marketers need to have some marketing strategy to enter the desired market and make profit. Market segmentation is the process of dividing a market into subsets of consumers with common needs or characteristics (Schiffman et al., 2011). Understanding the market size and segmentation is valuable, but the keys to effective targeting is to know just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends ( Berry, 1999).

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and applications

What is Market Segmentation? According to Investopedia (n.d), market segmentation is a term used in marketing that refers to the aggregating of a potential buyer into groups, or segments, that share common needs and would respond similarly to a particular action in marketing. By utilizing market segmentation it enables Victoria’s Secret to target different categories of consumers who recognize the full value of certain products and services differently from one another. Furthermore, market segmentation is an extension of market research for the purposes of identifying targeted groups of consumers in order to tailor products and branding in a way that it is attractive to that group. There are three general criteria used to identify different market segments: homogeneity, distinction and reaction (Investopedia, n.d).

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

The current one on one market research tool is insufficient to gather the relevant market information needed by the company since it takes a lot of time for a single company representative to interview a single consumer to get relevant feedback (Smith, 2013). Other efficient market research is tools be employed to collect more information in a short span of time. These alternative tools include, focus groups, which will aim at determining effective messages that sent to clients. Additionally, use of surveys such as online questionnaires to collect ideas, opinions. and information from consumers may be effective especially for collection of quantitative and qualitative data (Freeland, 2012).

Segments. A ‘market’ after all is the aggregate of consumers of a given product. And, consumer (the end user), who makes a market, are of varying characteristics user and buying behaviour. There are different factors contributing for varying mind set of consumers. It is thus natural that many differing segments occur within a market. In order to capture this heterogeneous market for any product, marketers usually divide or disintegrate the market into a number of sub-markets/segments and the process is known as market segmentation. Segmentation thus we can say that market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting

Market segmentation is an approach used by a company to select their target market and provide data for a marketing plan. “Market segmentation consist of a two-step process; naming broad product markets and segmenting these broad products-markets in order to select target markets and develop suitable marketing mixes” (Perreault, Cannon, & McCarthy, 2014, p.97). There are 4 categories pertaining to market segmentation; behavioral, geographic, demographic, and behavioral.

Different types of segmentation should be considered. For example, the mass market that basically caters to a large group of customers with similar needs and problems; the niche market where there are specific customers segments and, therefore, the elements of the business model are designed to suit the requirements of each group; or the segmented and diversified markets. It is basic to identify them properly. The deeper knowledge of these segments, the better for the business model. Market research is needed before making the decision.

The world is made up of different people, therefore segmentation provides consumers products that fulfil their individual needs. Martin (2011) states that companies have to try different segmentation variables either alone or in combination because often the best choices arise from using various strategies. There are few ways to segment a market, therefore, companies must think innovatively and be willing to re-segment if needed.

‘Market segmentation represents an effort to identify and catergorise groups of customers and countries according to common characteristics’ (Keegan and Green 2016, p.228). For any business, it is crucial that they segment their market accordingly or they will risk forgoing sales opportunities. Fahy and Jobber (2015) identify the objective of market segmentation as distinguishing groups of customers with similar requirements so

“A task force concluded, the past segmentation did not fully address the emerging shift in customer needs” “(Xiameter Case Study). Dow Corning had to thus try different segmentation variables, alone and in combination to find the best way to view the market structure. (Kotler et al, 2008).