Your assignment should be word typed processed (handwritten assignments are not accepted), using Times New Roman size 12 font, double spaced, with numbered pages and your student number printed as a footer on every page. The word limits stated for this assignment excludes the reference list at the end of the assignment but includes all text in the main body of the assignment (including direct quotations, in-text citations, footnotes, tables, diagrams and graphs). Please be aware that exceeding the word count limit will affect the academic judgment of the piece of work and may result in the award of a lower mark. Appendices are not considered a supplement thus will not be assessed as part of the content of the assignment. As such, they will not contribute to the grade awarded, however it may be appropriate to use an Appendices section for any material which is a useful reference for the reader. Please note that appendices are not included in the word count. The majority of references should come from primary sources (e.g., journal articles, conference papers, reports, etc.) although you can also utilise area specific textbooks. You must ensure that you use the Harvard style of referencing. Please indicate the word count length at the end of your assignment.
Introduction This topic overview provides a summary on Segmentation, Relationship marketing and loyalty.
Learning Outcome from the Module Outline: LO3 Analyse marketing activities across a range of organizations and develop problem-solving skills in marketing
LO4 Demonstrate a critical understanding of the importance of developing relations with stakeholders (with a focus on customers and consumers), and suggest strategies for the sustainable management of such relationships
1.What is marketing segmentation?
The process of splitting customers or potential customers in a market into different groups or segments within which customers share a similar level of interest in the same or comparable set of needs satisfied by a distinct marketing proposition (Malcolm McDonald, 2008).
The world is made up of many different consumers, each with their own set of needs and behaviors. Segmentation seeks to complement consumers with products that satisfy their individual set of needs and behavior patterns. As a result, this is known as a „segmenting‟. Think of a market as a chain of connected and unique segments, each with its own profile. Companies can uncover new segments by researching the hierarchy of attributes that consumers will consider when choosing a brand (Kotler). Marketing segmentation strategies can be cultivated through an extensive choice of attributes found among purchasers. One faction within the market may be recognized by gender, while another may be made up of purchasers within a certain age category. Locality is another general element in market segmentation, along with earning level and culture level (Martin, 2011).
There is no single way to segment a market. A marketer has to try different segmentation variables, alone and in combination (Kotler & Armstrong, 1996). In order to be successful in today’s global market, Organizations will have the think innovatively, be willing to change and quickly adapt to the new ways of conducting business in this twenty-first century. Nevertheless, a great deal of organization is now facing a larger number of small consumers who do not think segmentation is worthwhile. However, these suppliers must look for broad classes of consumers who adapt in their products or services needs and buying habits (Kotler & Armstrong, 2008). Previous studies show that mass marketing creates the largest potential market at the lowest costs, which can lead to lower prices and higher profit margins.
1.1Steps of the Market Segmentation process
Consumer market segmentation includes:
For Consumers The geographic segmentation signifies a market divided by location. Geographic segmentation is based on the belief that consumers who live in the same region share some related wants and needs and those wants and needs could be very different from the consumers who are living in other regions of the world. For example, some products and services have high demand in one region but not demanded in other regions. Despite its meaning, geographic segmentation may differ from area to area. Geographic biases may depend on the different brands available. In a number of areas, one brand may be very well liked and accepted but it may not be known by a majority of the consumers (Martin, 2011).
Demographic segmentation consists of demographic factors such as age, ethnicity, nationality, occupation, etc. Therefore, with these variables in mind, an organization can choose which consumer they will accommodate. For example, an organization dealing with the younger generation will have to target the consumers between the ages of 18 and 45 years, while an
organization dealing the older generation will have to concentrate on consumers between 46 and up. Demographic segmentation aids an organization in understanding its consumers and satisfying their wants and needs. In today’s global market, competition is driven by a strong competition causing demographic marketing analysis to be a great advantage to any organization (Martin, 2011).
A variety of strategies for segmentation is available. However, previous studies show recommendations that behavior-based strategies work well for most organizations. Segmentation based on consumer behavior variables normally included a sub-segment of consumer segmentation. Organizations often collect this data to see the segment that best fits their consumer behavior. Behavioral segmentation can be the answer for a great deal of organizations on where to lavish their next marketing currency (Martin, 2011).
Psychographic segmentation was developed by marketing researchers to correlate personality with brands. Psychographics is classified as “the study of personality, values, attitudes, interests, and lifestyles.” Organizations need to know their consumers‟ habits to effectively connect with them and for the consumer to identify the organization’s products or services. Psychographic segmentation acts on the psychology of the prospective consumer and helps the merchant decide how he or she must manage their consumer that belongs to any specific segment (Martin, 2011)