A new started business usually produces a product with limited quantities for limited market for limited market. The purpose of this is to explore the market and find out the market response. Moreover, the fast changing of customers’ taste may cause the different perception between producers and consumers. Therefore, to avoid the risk that may the loss, then the company should take into account production quantity.

This encourage the company to find a certain consumer group that will serve as its target market. This is called market segmentation.

Market segmentation is defined as the company’s strategy which the company is not merely differentiate a product or create new product but by grouping the market based on customers’ interest and requirements. In short, market segmentation is the grouping of a heterogeneous market into a homogeneous buyer (consumer), in which each consumer is homogeneously targeted as its own marketing mix.

If we recall the extensive market, then there must be a goal for market segmentation activities or dividing the market into small groups according to its characteristics.


Easily making distinguished market

Each product to be produced is certainly aimed to meet the desires and needs of each customer. In order for products to be in production can be received by consumers then certainly must be in accordance with consumer tastes.

On the other hand, the heterogeneous market condition and the changing of customers’ tastes would be difficult for companies to keep up the changes continuously.

As the result, a company needs to classify their homogeneous customers into groups based on the same characteristics to recognize its customer’s taste. This will make the company to map the market easily based on the market group.

Deliver better service to buyers

In order to assist consumers to meet their needs, there are four important things that must be noticed by a producer such as: affordable price, good quality goods, on time and excellent service. Of the four things that have been mentioned, the crucial point is the service.

Many cases occurred relate to service problems, bad service will make the consumer to switch to another place. The second is the price issue and product or service quality. As a result, it is necessary to create market segmentation to provide maximum service to the customers.

One of the service forms is providing a large – free – of charge – parking area. These services can attract the consumers’ attention to visit your store and purchase some products.

Create a more focused marketing strategy

The large and various markets make the company to be more difficult to serve the diverse customers’ needs. The market segmentation will categorize them into homogeneous consumers, so it will be easier to serve homogeneous consumers because they already have the same characteristics. Thus, your marketing plan can be more focused to create a marketing mix that includes product, price, distribution and promotion. Moreover, by segmenting the market it helps the management to direct the funds and business into more potential market. The potential market will provide more benefits for having a clear target and plan the proper products to meet the market’s interests and demands.