Market Segmentation Theory

In: Business and Management

Submitted By docrehan
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Marketing Segmentation Theory”
Defining the Segmentation:
Segmentation can be defined as “the term given to the grouping of customers with similar needs by a number of different variables”.
In simple words it can also be define as “the act of dividing or partitioning; separation by the creation of a boundary that divides or keeps apart”.
What Does Market Segmentation Mean?
“A marketing term refers to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action”.
Market segmentation can also be define as “the process of dividing a market up into different groups of customers, in order to create different products to meet their specific needs”.
The most obvious type of segmentation is between customers who buy distinctly different products. For example, in manufacturing sandwiches, you would clearly be able to make a distinction between creating sandwiches for vegetarians and those for meat eaters.
Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Generally three criteria can be used to identify different market segments:
1) Homogeneity (common needs within segment)
2) Distinction (unique from other groups)
3) Reaction (similar response to market)
What is Market Segmentation Theory?
“A modern theory pertaining to interest rates stipulating that there is no necessary relationship between long and short-term interest rates”. Furthermore, short and long-term markets fall into two different categories. Therefore, the yield curve is shaped according to the supply and demand of securities within each maturity length.
The Market segmentation theory states that most investors have set preferences regarding the length of maturities that they will invest in. Market…...

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