Due to the broad nature of the market, promoting products will be too high and unattainable. There is need to divide it into small sets so that maximum satisfaction to the set of clients could be achieved. The following are several reasons to segment a market.
1. Increase in Profit
Except for few organization that are not profit oriented, Most businesses are setup to make profits.However, clients have different disposable income and also their sense of disbursement are quite dissimilar. Segmenting a market will enable organization sell same product to different set of clients supported their disposable income. Organizations can enhance their profits this way by raising their prices for different segments.
2. Popularity in the Market
Through careful segmentation and proper targeting, small businesses are able to contend with stronger and leading ones in the market. Usually strong companies have an edge over small ones in terms of production and merchandising cost which are very lower since they already are the choice of the clients. But by dividing the market into small groups and focusing on just the need of target market segment, the small firm will be able to have an edge in this target segment.
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3. Better Customer satisfaction
As declared above, clients sensitivity are different. So also are their needs. By creating separate solutions for each segment a better satisfaction to the clients can be achieved.
4. Better chance for product gross revenue growth
Market segmentation can build gross revenue margin. A clients may be pleased to sell a product he has bought before for other one (trade-up) so as to improve the sale margin of the later one.
5. Very easier client-business communication flow
Manufacturers of products need to advertise and deliver their substance to a in question client audience. And where there is a broad target market, there is a strong risk that the key clients will be lost and even the cost of communication to clients will be too high. But if the market has been segmented, the target clients can be easily reached more often and at a lower cost
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