Identify The Specific Components Of A Market

Identify the specific components of a market segmentation strategy and discuss the strategic and economic importance of each component.Solution:Marketing Segmentation is an effort which helps in increasing company’s precision marketing. Market segmentation involves forming groups which have the same characteristics so that the product can be offered to the entire market segment. Market segmentation means dividing a broad market into segments of customers who have common needs and aspirations for the goods and services produced. There needs to be some bases according to which the market will be divided into homogeneous segments. One of the important sources of market segmentation is demographics. Demographics means dividing the market into groups based on age, gender, income, education, family income, religion etc. Demographics provide an important base to divide the target into groups based on the above factors so as to cater the needs of the target market. When segmenting consumer markets, it becomes quite easy to segregate markets when demographics are known because this base provides all the necessary information about the target market. The four major components of market segmentation that the company needs to focus on is that the segment should actually exist in the market, the segment selected should