Customer Segmentation Literature Review

Open, View, and/or
Download this Document

Total Length: 1345 words ( 4 double-spaced pages)

Total Sources: 5

Page 1 of 4

Customer segmentation refers to the division of customers in a market according to similarities they share. Such characteristics include spending routines, age, gender, interests among other traits. Segmentation is an efficient marketing tool as it allows the organization to focus on a group of customers in the market. The management is able to use segmentation to allocate adequate resources that address the selected group. The management of an organization use segmentation as an innovation tool. The organization is able to identify the needs of majority of its customers and produce a product aimed for this market. Segmentation as an innovative and marketing tool enables the organization to attract and retain a client base that will support an organization's operation.

Marketing research is among the methods used to evaluate the customers segments in a market. Customer segmentation profiling enables the producer to identify the consumer group to target in the market. From profiling, the management is able to understand the needs of the customers and formulate ways of addressing these needs. Profiling also enables management to understand the efficient ways that the company can use to reach the selected segment. New and old businesses can make use of market segmentation. New businesses can use market segmentation to enter a market while established organization can use market segmentation to maintain their revenue base (Hulten, 2007).

Organizations that use segmentation as a marketing strategy ensure that they produce products for all segments but focus on one segment. The segment may be responsible for high volumes of sales or high revenue generation. Large organizations often focus on the needs of many segments by producing products that cater for each segment. Segmentation ensures that the organization maximizes it potential to attain its goals. The paper evaluates how market segmentation affects the marketing strategy used by Toyota. Toyota is a Japanese car manufacturer that provides vehicles to a global market.

Segmentation

The company is among the major car producers in the market providing a wide range of products. The company uses segmentation to maximize on sales and market domination.

Stuck Writing Your "Customer Segmentation" Literature Review?

View All Our Example Customer Segmentation Literature Review

Have A Custom Example Essay Written

The company can categorize its market into various segments depending on the traits of the customers. Concerning income, the company produces products that will cater for the high-income earners, middle-income earners and low-income earners. The market segment can also use fuel consumption as a segmentation characteristic. This is where the company produces fuel-efficient vehicles with low engine capacity, moderately efficient vehicles and high performance vehicles, which have high engine capacities. The company also uses marital status to produce its vehicles. Vehicles for single people compared to cars for couples and people in a large family are other segmentation criteria.

The paper will cover segmentation concerning the income generated by the customers. The cars produced to cater for the three market segments ensure that the company diversifies its income. The high-income earners are few in the market and emphasis on quality. Engine capacity is not an issue in this group with most vehicles having more than 2000 cc capacity engines. The products are expensive and usually produced in limited stocks. Production of new designs in these segments takes place after a long time due to the lack of frequent customers (Epstein, Friedl & Yuthas, 2008).

The middle class segment is comprised of middle-income spenders who spend more than the low-income earners. Pricing for this vehicles is moderate have moderate features. The engine size is about 1800 cc, which ensures that the performance of the vehicle is moderate. The last class is the low-income earners who have the money to spend on vehicles. The vehicles for this segment are cheap and do have low fuel consumption. Owing a car provides extra expenses for the owner thus the need to purchase within the income limit.

Promoting market awareness

The form of advertising used by the company should ensure that the message reaches the targeted customers. The manufacturer should ensure that the mode of advertisement used by many customers in a segment promotes the product. The advances in technology have made communication easier….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Customer Segmentation" (2012, August 01) Retrieved June 4, 2026, from
https://www.aceyourpaper.com/essays/customer-segmentation-109776

Latest MLA Format (8th edition)

Copy Reference
"Customer Segmentation" 01 August 2012. Web.4 June. 2026. <
https://www.aceyourpaper.com/essays/customer-segmentation-109776>

Latest Chicago Format (16th edition)

Copy Reference
"Customer Segmentation", 01 August 2012, Accessed.4 June. 2026,
https://www.aceyourpaper.com/essays/customer-segmentation-109776
   

Open, View, and/or
Download this Document
order custom essay example