8. What is segmentation of a market?

A segment is a group of customers or potential customers with similar characteristics, needs and requirements.

The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are "most likely" to purchase your offering. If done properly this will help to insure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments.

Segmentation, which can be done in various ways, allows marketers to identify and differentiate between the needs of the target groups of customers that make up a particular market. They may offer different products to different segments, or the same product, marketing it in different ways.

A market segment is a group of individuals or organizations within a market that have similar characteristics and needs. The market segmentation approach directs a marketing mix at a segment of a market.

9. Why do companies choose target markets?

A target market is the market at which the material is aimed. A target market is chosen through the market segmentation approach.

The most successful small businesses understand that only a limited number of people will buy their product or service. The task then becomes determining, as closely as possible, exactly who those people are, and 'targeting' the business's marketing efforts and dollars toward them.

You can build a better, stronger business, by identifying and serving a particular customer group – your target market.

You need to understand that people purchase products or services for three basic reasons:

• To satisfy basic needs.

• To solve problems.

• To make themselves feel good.

You need to determine which of those categories your product or service is the solution to, and be prepared to market it accordingly. Your product or service may fit more than one category.

Your answer:

10. What is the purpose of marketing research?

Marketing research (MR) is the activities involved in obtaining information about a particular market, including how much of a product is being sold, who is buying it etc, or information about what they might buy.

Market/marketing research is the collection and analysis of information about consumers, competitors and the effectiveness of marketing programs.

Small business owners use market research to determine the feasibility of a new business, test interest in new products or services, improve aspects of their business, such as customer service or distribution channels, and develop competitive strategies.

In other words, market research allows businesses to make decisions that make them more responsive to customers' needs and increase profits.

While market research is crucial for business startup, it's also essential for established businesses. It's accurate information about customers and competitors that allows the development of a successful marketing plan.

One of the purposes of marketing research is marketing strategy. A marketing strategy is a plan for the best use of an organization 's resources to reach its objectives. Developing a market­ing strategy involves selecting and analyzing a target market and creating and maintaining a marketing mix that will satisfy that market.

Market measurement and sales forecasting are used to estimate sales potential and predict product sales in specific market segments. Strategies are then monitored and evaluated through marketing research and marketing information system, which stores and processes internal and external data in a form suitable for marketing decision making.