Market Segmentation in Healthcare

With the development of many technologies, companies are benefiting from this strategy because they carry out due diligence to know the likely risk they are to encounter hence adapting to market segments. First, market segment helps organizations in reducing risk by knowing when, how and where to channel their products and services upon production (Kotler, 2003). It assists the organization to know when and how to market their products and serviced depending on their target markets. Secondly, segment marketing assists organizations in increasing marketing efficiency because it directs them to the target consumers, hence minimizing other wastages (Kotler, 2003). It allows organizations to produce or distribute goods and service according to a segments’ characteristics, which is very effective. In many cases, organizations make losses when they produce goods and offer services without knowing their target markets or audiences (Brown, 1996). Thirdly, market segmentation helps companies to study consumer behavior, which is useful in pre-focusing of sales volumes and in making recommendations (Kotler, 2003). Organizations that conduct market segmentation knows the seasons when their target consumers are active in buying. hence, they can use this information in planning their productions as well as in focusing the sales volume (Walston, Kimberly Burns, 1996). Market segmentation is divided into four levels, namely. geographic, demographic, psychographic and behavioral segmentation, and they serve different purposes depending on different factors (Kotler, 2003). Geographic segmentation is a strategy where a company or an organization sells its products and services in certain places in the world or in a defined boundary where it perceives to impact its marketing mix (Nobel Mokwa, 1999). Demographic segmentation is where an organization divides its market as per gender, age, income, and household income, as opposed to all consumers in the market (Nobel Mokwa, 1999). In this case, an organization becomes specific to the target gender, age, and income when entering a market.