Argument for Market Segmentation

commercialize sectionalization is the process of dividing the market according to similarities that exist among the various sub meetings within the market. The similarities whitethorn be common characteristics, or common needs and desires. (All vexation Directory Of Business Terms 2011) Market air division has become an important function in the cashboxing intentness because of the existence of intense competition, non only within the industry simply also from the likes of finance and insurance companies. Banks deal with various types of customers e. g. , persons, group of people, corporate entities, etc. ho all take away their likes and dislikes.No cuss can afford to assess the need of each and every individual customer separately. It is nearly impossible for beachs to market all these categories of customers on a one-to-one basis, particularly if they simply rely on predictable socio-economic information like age and income as the base for dividing customers into segm ents. To overcome this problem, a bank must adopt a market partition strategy, which recognises the wisdom of specialising to conciliate the need of a segment of the market rather than trying to direct the requirements of each and every customer separately.Spark Slide 43 highlights that division is needed because you cannot be all things to all people. Market segmentation enables more accurate and effective communication of benefits in relation to needs. Market segmentation would also help the bank or any system identify growth opportunities. ?Market of banking products can be segmented in a number of different ways. Market segmentation must have certain qualities that make it possible to specialise the marketing approaches.The segmentation must be measurable in impairment of the criteria used for segmentation getatable through the distribution system and sizable in volume in order to generate the economy of operations. One of the rational ways of segmentation could be divid ing the banking market into retail and wholesale market. With market segmentation a bank can gain a competitive edge by programming different marketing strategies for customers of different segments. It could be argued that a bank segments its market into more or less homogeneous groups, in terms of their needs and expectations from the banking industry.With out market segmentation, organisations do not fully read their market, their competitors strategies, and their own customer and prospect base, meaning they ar simply not equipped to compete effectively. Their attempts to attract customers willing be fruitless, both because the propositions are not sufficiently targeted to be fully relevant to the majority of customers, but also because the communications and channel activities aimed at customer acquisition will lack focus and relevance.