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Business studies> Marketing> Segmentation analysis

Segmentation analysis is a way of dividing up a market to identify trends in it. Segmentation analysis is used to create a profile of the target market. The following can be taken into account when segmenting a market:

Age,

Gender,

Class,

Income,

Location,

Hobbies.

This information can help the company a lot with its marketing efforts. It can be used to set quotas on a market research exercise or be used to decide what promotional method is most appropriate for the market.

In general, the following are advantages of segmentation:
More efficient use is made of marketing resources - less waste.
A competitive advantage can be gained in a particular part of a market.
It's beneficial for small firms as uses less resources.
Products can be modified to be exactly what the consumer wants.
Marketing mix can be more targeted.

The following are disadvantages of segmentation:
Increased costs to develop variations of the product.
Higher stock holding costs.
Higher advertising and other costs.