Even marketers with years under their belts can get tripped up on the difference between these two terms. So what exactly is the difference and how does each play into a marketing strategy?
Tedlowidentifies four stages in the evolution of market segmentation: The economy was characterised by small regional suppliers who sold goods on a local or regional basis Unification or Mass Marketing s—s: As transportation systems improved, the economy became unified.
Standardised, branded goods were distributed at a national level. As market size increased, manufacturers were able to produce different models pitched at different quality points to meet the needs of various demographic and Travel market segmentation market segments.
This is the era of market differentiation based on demographic, socio-economic and lifestyle factors. Technological advancements, especially in the area of digital communications, allow marketers to communicate with individual consumers or very small groups. This is sometimes known as one-to-one marketing.
The practice of market segmentation emerged well before marketers thought about it at a theoretical level. Retailers, operating outside the major metropolitan cities, could not afford to serve one type of clientele exclusively, yet retailers needed to find ways to separate the wealthier clientele from the "riff raff".
One simple technique was to have a window opening out onto the street from which customers could be served.
This allowed the sale of goods to the common people, without encouraging them to come inside. Another solution, that came into vogue from the late sixteenth century, was to invite favored customers into a back-room of the store, where goods were permanently on display.
Samuel Pepys, for example, writing indescribes being invited to the home of a retailer to view a wooden jack.
Tourism market segmentation is the strategic tool for getting a clear picture of diversity among the tourists. The tourism researchers and the tourism industry use market segmentation information to study the opportunities for competitive advantage in the marketplace. The four bases for segmenting consumer market are as follows: A. Demographic Segmentation B. Geographic Segmentation C. Psychographic Segmentation D. Behavioural Segmentation. Demographic segmentation divides the markets into groups based on variables such as age, gender, family size, income. In this section, we discuss five important segmentation topics: levels of market segmentation, segmenting consumer markets, segmenting business markets, segmenting international markets, and requirements for effective segmentation.
A study of the German book trade found examples of both product differentiation and market segmentation in the s. Contemporary market segmentation emerged in the first decades of the twentieth century as marketers responded to two pressing issues.
Demographic and purchasing data were available for groups but rarely for individuals and secondly, advertising and distribution channels were available for groups, but rarely for single consumers. Thus, segmentation was essentially a brand-driven process. Smith is generally credited with being the first to introduce the concept of market segmentation into the marketing literature in with the publication of his article, "Product Differentiation and Market Segmentation as Alternative Marketing Strategies.
However, with the advent of digital communications and mass data storage, it has been possible for marketers to conceive of segmenting at the level of the individual consumer. Extensive data is now available to support segmentation at very narrow groups or even for the single customer, allowing marketers to devise a customised offer with an individual price which can be disseminated via real-time communications.
But in spite of its limitations, market segmentation remains one of the enduring concepts in marketing and continues to be widely used in practice. One American study, for example, suggested that almost 60 percent of senior executives had used market segmentation in the past two years.
Depending on company philosophy, resources, product type or market characteristics, a business may develop an undifferentiated approach or differentiated approach.
In an undifferentiated approach, the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers. In consumer marketing, it is difficult to find examples of undifferentiated approaches.
Even goods such as salt and sugarwhich were once treated as commodities, are now highly differentiated. Consumers can purchase a variety of salt products; cooking salt, table salt, sea salt, rock salt, kosher salt, mineral salt, herbal or vegetable salts, iodised salt, salt substitutes and many more.
Sugar also comes in many different types - cane sugar, beet sugar, raw sugar, white refined sugar, brown sugar, caster sugar, sugar lumps, icing sugar also known as milled sugarsugar syrup, invert sugar and a plethora of sugar substitutes including smart sugar which is essentially a blend of pure sugar and a sugar substitute.
Each of these product types is designed to meet the needs of specific market segments. Invert sugar and sugar syrups, for example, are marketed to food manufacturers where they are used in the production of conserves, chocolate, and baked goods.
Sugars marketed to consumers appeal to different usage segments — refined sugar is primarily for use on the table, while caster sugar and icing sugar are primarily designed for use in home-baked goods.
Different types of sugar: White refined, unrefined, brown, unprocessed cane Main Strategic Approaches to Segmentation  Number of segments.Travel Marketing Events, by the organisers of The Travel Marketing Awards, is a series of quarterly events that will combine quality networking with the very latest thinking, tools and trends in travel .
Modern marketing techniques in industrialized countries cannot be implemented without segmentation of the potential market. Goods are no longer produced and sold without a significant consideration of customer needs combined with a recognition that these needs are heterogeneous. Travel and Tourism in Madagascar: With efforts by the government to re-establish peace after a political crisis in , visitors have come back to.
Feb 06, · B. Use a funnel approach.
For some CEOs, it might be helpful to think of the market selection process as a multiple staged funnel. For example, your first bucket might be gender. Segmentation refers to a process of bifurcating or dividing a large unit into various small units which have more or less similar or related characteristics.
The marketers divide the market into smaller segments based on gender. Both men and women have different interests and preferences, and thus. Corporate site. We’re creating a more connected travel industry, underpinned by sustainability and long-term investor relations.