University of East Anglia
How important is market segmentation in marketing strategy?

JIANG CONGYI
8/20/2013

Introduction
In the last few decades, market segmentation plays a far greater role in market strategy. With the rapid development of modern society, people's consumption concept has a huge change. Therefore, the enterprise formulates marketing strategy not only adhering to the historical experience, but also to adapt to the new changes. Ferrell and Lucas (1987) cited in Hooley et al (2012),” marketing is the process of planning and executing the conception, pricing, planning and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.”(p.6). This essay will consider market to mean” Marketing is a distinct activity within an organization, as well as certain tasks, such as assembling, pricing, and promoting, that result in products, services, ideas, and other tangible and intangible items.”(Levens, 2010, p.3). This essay will talk about different ways to segment consumers, and the importance of market segmentation in the marketing strategy.

Definition
Many definitions of market segmentation have been propose, but in our view the original definition proposed by Smith has retained its value (Wedel and Kamakura, 2000, p.3). According to Smith(1956) cited in Baines et al(2011)” The original definition of market segmentation as ‘a condition of growth when core markets have already been developed on a generalized basis to the point where additional promotional expenditures are yielding diminishing returns.’”(p.208). Robinson(1938) cited in Wedel et al(2011)state”market segmentation involves viewing a heterogeneous market as a number of smaller homogeneous market, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction of their varying wants.”(p.3) Baines, Fill and Page(2011) pointed out” The purpose of market segmentation is to ensure that the elements of the marketing mix, namely, price distribution, products and promotion are designed to meet particular needs of different customer group.”(p.208)

Types of market segmentation
The purpose of market segmentation is organizations can use market segmentation to satisfy different people’s different needs. And depend on similar needs to distinguish consumers (Bobby and Paton, 2011). According to Fill(2009), ” Market segmentation is the division of a mass market into identifiable and distinct groups or segments, each of which has common characteristics, needs and display similar responses to marketing action.” (p.291). There are four main ways to segmented consumers. The first one is geographic segmentation. This segment markets might include considering region or country where consumer live, such as city center, urban or rural. Some businesses selling different products to different regions or countries, for example, KFC has sold noodles and rice in China and pickled vegetables are salad in Korea. And some businesses sell same products at different price in different countries. For example, the car company sell the same car in China and Japan have different price. The second one is demographic segmentation. The demographic segmentation can be defined as splits people up into different groups according to different characteristics (Anderton et al, 2008). Demographic variables related to age, gender, social class, income, religion and ethnic grouping. According to Baines, Fill and Page said” Age is a common way of segmenting markets and is often the first way in which a market in delineated.”(P216). For example, children’s needs and taste are very different from older people. Children like toys, snacks and games, but the older people are targeted for cars and houses. Not only the age difference, but also male and female have different spending patterns, so business also focusing on gender difference. For example, male always pay attention to cars,