Definition Of Market Segmentation
Market segmentation can be defined as a process of dividing the entire marketplace into separate groups, consisting of individuals who have similar products or services needs. This concept is mostly used by the companies to enhance their customer retention plans and aid make sure they are concentrated on holding most profitable prospects, and using most effective techniques to retain the customers. |
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The basic idea to retention based market segmentation is that company gives each of active consumers with three values:
- Is the consumer at high risks of becoming non user or canceling company’s services?
- Is the consumer worth retaining?
- What retention schemes should be utilized to keep hold of the customer?
The tactics used commonly may range from offering special discounted offers to sending communications that support the value proposition of given service. The major idea here is to evaluative active prospects with the prospects from past retention details, who have similar properties. As per a theory, active prospects will always have same retention results as that of comparable predecessors. Considering the technical perspective, segmentation procedure is also performed using the combination of cluster analysis and predictive analytics.
Once a segment of the market has been identified, and targeted, the segment or the division is subjected to positioning. It involves determining how a company or a product is professed in minds of customers. The process includes drawing a perceptual chart, which puts light on rival products within the market, in accordance to the perceived price and quality.
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Definition Of Market Segmentation
