Segmentation
1. Segmentation is a process of ensuring division or partition in accordance with needs. The objective of segmentation is to achieve simplicity (Williams & Curtis, 2007). Further, its purpose is to ensure innovation, diversification, nurture, defend, re-launch, keep, and repositioning of the product. There are several segments in the industry according to the specific domain. This can be considered from an example that the software can be divided or segmented by the product’s nature, customers, and locations etc. There are two approaches that are widely used in segmentation; they are macro segmentation and micro-segmentation. In macro-segmentation, organizational size and industry location etc are considered. In micro-segmentation, quality of the product, attitude of the buyer, and price etc are considered. There are various types of industry segmentation, the most common segmentation in industry is:
Market Segmentation
Customer Segmentation
Product Segmentation
Market segmentation is done when organization or people share demand for same or similar products or services, or when there is homogeneity. 4 P’s, which are product, price, place, and promotion, are major elements and concepts in market segmentation (McDonald & Dunbar, 2004). Market segmentation can be geographic, demographic, behavioral, and psychographic.
In product segmentation, division is ensured on the basis of needs of customers (Pride & Ferrell, 2010). In this type of segmentation, the products are segmented on the basis of volume or growth potential. Product segmentation helps in understanding wants, needs, and demands of customers in a better manner. It also paves the way to improving standards associated with service delivery.
In customer segmentation, customer base is divided into groups (Saxena, 2009) Customer segmentation is ensured on the basis of gender, age, interests, and purchasing habits etc. For customer segmentation, population of people is divided into smaller groups.
2. In a software industry, there can be many types of segmentation, the main being, market segmentation, customer segmentation, and product segmentation.
Market segmentation in the software industry is on the basis of technology, innovation, and business intelligence systems. The software industry is ensuring market segmentation for paving the way to competitive insight and increased productivity.
Customer segmentation in the software industry is on the age, gender, and ease-to-use of the customers. The industry facilitates customers in accordance with their mental capabilities so that they can handle and use the software in an effectual manner.
Product segmentation in the software industry is on the basis of needs, wants, and problems faced by customers in dealing with particular software. In the software industry, product segmentation helps in understanding role of customers or buyers in the organization, and also it helps in identifying problems and wants of customers or buyers.
In my opinion, a company should identify the industry segment and target market, and then design its products or services in order to reach the markets. This is because the identification of the industry segment helps in analyzing threats and opportunities, and identification of the target market makes the company better aware of the needs and requirements of the customers. All this will help the company to position itself in the market in an effectual manner, and also help in ensuring the success of the business. It will, however, also serve as a very useful idea for facilitating customers in a better manner, because organization becomes aware of all is what required, and provide the products that are needed by a particular market segment. Identification of the industry segment and target market before designing a product or service will help in ensuring flexibility and also help in smooth conduction of the business.
References
McDonald, M., & Dunbar, I. (2004). Market Segmentation: How to Do It, how to Profit from it. Elsevier Butterworth-Heinemann, Burlington
Pride, W.M., Ferrell, O.C. (2010). Marketing. Nelson Education Limited, Canada
Saxena, R. (2009). Marketing Management. Tata McGraw Hill, New Delhi
Williams, J., & Curtis, T. (2007). Marketing Management in Practice 2007-2008. Routledge, New York
