Question

How can customer segmentation help you? How can product (market) segmentation help you? What's the difference? How do you think technology is changing these groupings and how we identify them? Be sure to use examples to support your answer.

Answer 1

Customer segmentation can be considered as a process of separating the customers in a particular market based on their needs and their purchasing habits. We divide the customers in order to be able to target them better. We can, therefore, say that for a company, this becomes necessary as well as beneficial since their implementation becomes to focus on a single aspect which means they do not have to market their product as much or worry about the placement process. On the other hand, market segmentation can be considered as the different markets present in an industry which serves similar functions such as Volkswagen, which owns Audi has both the market segmentation for luxury cars and mid-range segments, targeting the different market segmentation allows them better options as well as provide more prospects for them based on the needs of the customers.

Technology such as the internet and the BIG DATA analytics process has allowed the companies to make their segmentation decisions easier by collecting relevant data from all the sectors of the industry, making use of distinct patterns or functions which can be separated based on similar aspects and therefore make the process of segmentation of both the market and the customers easier.