Market segmentation is the process of dividing a market into small parts which have different characteristics. Therefore this fully satisfies the individual and specific needs of customers. This is done especially in a situation where customers have very differing characteristics. Therefore a company finds it convenient to subdivide the market into parts that will enable it to fully reap the benefits of the market and its products. Diamond Freight Brokers is a company that is bound to operate in different countries, which will definitely have unique legal systems and thus it will have to conform to those requirements. This brings about demographic segmentation which means that it separates its market depending on the government’s requirement on some stuff. This includes taxation, business formation procedures including licensing and payment of import duty.
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The market for Diamond Freight Brokers is mainly the transportation of goods and services. These goods and services have been shipped from other countries to the inland country of the receiving state and to customers who are in landlocked countries. In its transportation, the company will pass through other countries. The countries will have different cultural and physiographical features (Selden, 1997).
The company will also set up other places of working, especially from other countries, so as to increase its profits or to benefit from economies of scale. This means it will geographically spread all over in search of newer markets. It will also receive customers’ goods from other countries and these goods will be for different people. These customers must come from different parts of the country and it will be hard to deal with them if the company does not know their cultural background. Therefore, it will be the duty of the company to carry out a study that will analyze its markets, and the targets they intend to accomplish and come up with a structure to have detailed information that will help in segmenting its markets.
Since the company will specialize in shipping particular types of goods and services it is the prerogative of the company to know that segment of the market well so as to fully impact those customers. This will include knowing who imports steel and lead: the main products that the company will be intending to ship and transport. During this transshipment, it is also the company’s prerogative to analyze the specific needs of the customers so as to know how well to handle the needs of the customer.
Types of Segments
Under this type of division, the company will employ age differences and other people characteristics to subdivide the market. It is not appropriate at all as it works where there are trendy goods and services involved. The company will be dealing with all forms of imports and its major work will be handling and transportation; meaning that it will be selling in bulk. Therefore, there will be no direct involvement with customers who are the final users. Therefore, being high up the supply chain eliminates this type of segmenting a market (Keller, 2009).
The company will be most optimally operating if it chooses to operate under geographic segmentation. This will give it an advantage since it will just have to look after a small number of people at any one time. It will also have the prerogative of choosing the safest places to have its business set up. This will be determined by factors such as security, infrastructure, people and government regulation among others. Various methods may be employed by the company to enable it to have up-to-date information as concerns the market. The most common is conducting research that is aimed at knowing the customer’s needs before coming up with a product. The other very important thing is to have a customer market information system that has a database for customer demographics, physiographic and other variables so as to equip the company with the needed arsenal to combat such changes.
Based on the fact that the company will want to divide its market according to the countries and regions, this will mean they are engaging in division of the market as per the demographics and the different ways they are unique. A country’s culture has some distinct features that make it have a way that it must be handled. A country’s legal and economic status will be very crucial as it will determine its infrastructure and other amenities that make it possible to transport goods. This includes good roads. A country with bad roads for example will mean that more is charged for a single unit of transported goods than a country with better roads. It will translate into a cause-and-effect situation.
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Under this type of segmentation, the company recognizes the different characteristics of a customer and bases that to segment its market. At Diamond Freight Brokers this will not be the case as the goods the customers are dealing with are not consumer goods which are the base from which this type comes in. The market for the various goods and services is subject to the trends associated with customers. These customers will change their tastes and preferences of the various commodities they purchase and use, and if not well observed, may lead to a company like this one losing a market share. This means that trends in the market that make customers change from using a particular product to another should be closely monitored to have up-to-date information pertaining to the same. Tastes may change due to a number of factors such as new brands in the market, lowered prices or influence of the customer’s psychological set up which is subject to marketing research.
The company deals with goods and services that are not offered firsthand. Rather, they are offered at the beginning of the supply chain. This means some forms of market segmentation will be ineffective in customer influence if employed. It is therefore prudent to eliminate them and have a better way of segmentation which is geographical. The types of goods that the company is involved in can be used to manufacture other goods and services. Therefore, segmentation cannot happen along some lines. The company will also operate from a legal system that differs from one country to another. This makes it paramount to have a clear and visible difference from one country to another. This is basically due to the government and the legal setup. This change will mean many customers spread over many places may enjoy differing services of a similar company due to their governments and legal systems (Joshi, 2005).
Joshi, R. (2005). International Marketing. New Delhi and New York: Oxford University Press.
Keller, K. (2009). A Framework for Marketing Management. Oxford: Pearson Prentice Hall.
Selden, P. (1997). Sales Process Engineering: A Personal Workshop. New York: Milwaukee.