MARKET SEGMENTATION 1

Market Segmentation

Essay Paper

July 25, 2014

281 words

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MARKET SEGMENTATION 2

Market Segmentation

Market segmentation refers to dividing the market into groups (segments) that possess

similar needs of the particular business1. Market segmentations enable full satisfaction of

customer needs that possess variations due to tastes and preferences. Market segments vary in

composition (homogeneity) and are unique from the others. These market segments possess

different reactions to market products, hence, need to be divided2 into distinct portions.

Targeting

In insurance, after segmenting markets, the next step is to choose your targets. The main

methods of choosing targets vary, but it includes, undifferentiated market, which views the

whole market as one single group, thus it uses a single marketing strategy. The other strategy is

multi-market targeting, which uses the same marketing strategy to market product on different

segments, which is considered to possess the same needs. Finally, concentrated market target, is

a strategy that chooses the particular segment and applies all marketing strategies there.

Targeting is particularly useful in attaining effective marketing and full market coverage.

Positioning

This is an act of creating a brand image and product development in the minds of

customers. Positioning includes convincing the customers about the perceived benefits of buying

your insurance products3. Positioning helps in long-term company growth since it helps to built

brand image in the market. Positioning takes a form of product introduction and market testing.

1
Wedel, M., & Kamakura, W. A. (2000). Market segmentation: conceptual and methodological
foundations (2nd ed.). Boston: Kluwer Academic.

2
McDonald, M., & Dunbar, I. (2004). Market segmentation how to do it, how to profit from
it ([3rd ed.). Amsterdam: Elsevier/Butterworth-Heinemann.
3
Hooley, G. J., & Saunders, J. A. (2004). Marketing strategy and competitive positioning (3rd
ed.). Harlow, England: Prentice Hall Financial Times.
MARKET SEGMENTATION 3

Bibliography

Hooley, G. J., & Saunders, J. A. (2004). Marketing strategy and competitive positioning (3rd

ed.). Harlow, England: Prentice Hall Financial Times.

McDonald, M., & Dunbar, I. (2004). Market segmentation how to do it, how to profit from

it ([3rd ed.). Amsterdam: Elsevier/Butterworth-Heinemann.

Wedel, M., & Kamakura, W. A. (2000). Market segmentation: conceptual and methodological

foundations (2nd ed.). Boston: Kluwer Academic.