Market Classification, Competition Types and Segmentation

Market Classification by Demand (4.2)

4.2. Market classification according to demand:

Consumer Market

Formed by all individual buyers. Final products in this market include immediate-consumption goods (non-durable goods) that are used and disappear quickly. Consumer durable products are used over time. In the services market, supply has an intangible character and is often inseparable from its production.

Organizational Market

Includes all non-individual end buyers. These may include: industrial (purchases by industries), institutional (nonprofit organizations), and intermediaries (organizations that acquire products to resell).

Market Classification by Competition

B) According to the competition:

• Perfect competition: Many buyers and sellers; no entry barriers to new products.
• Monopolistic competition: Many buyers and sellers with product differentiation; typically low entry barriers.
• Oligopoly: A reduced number of suppliers; there are barriers to entry for new products.
• Monopoly: A single supplier with many buyers; significant entry barriers to new products.

Geographical Scope

C) According to geographical scope: Local, regional, national, international.

Classification by Nature of Products

c) According to the nature of products: Markets may be classified by the degree of processing or the manufacturing process of the products.

Classification by Benefits

d) According to benefits: Segmentation and classification based on the preferences and benefits sought by potential customers.

By Consumer Characteristics

e) According to consumer characteristics: Classification based on consumer traits, behavior, and characteristics.

Demand and Supply Intensity

f) According to the intensity of demand and supply: Can be a seller's market (demand exceeds supply) or a buyer's market (supply exceeds demand).

Market Segmentation (4.4)

4.4. Market segmentation: It consists of dividing the market into homogeneous groups to enable the best possible commercial strategies. It also applies in markets where there is a large circulation of money.

Benefits of Segmentation

A) Benefits of segmentation:

• Identifying business opportunities.
• Detecting and defining potential segments and priorities.
• Improving customer-company relations.
• Adjusting the product to customer needs.
• Redesigning existing products.

Requirements for Effective Segmentation

B) Requirements for effective segmentation:

• Measurability: Segments can be assessed quantitatively to determine the size and strength of each.
• Accessibility: Segments should be easy to reach through distribution channels and means of communication.
• Substantial: Segments must be large enough to provide benefits.
• Stability over time: Segment characteristics and responses should be reasonably stable.
• Distinctive response: Different segments must respond differently to the marketing mix.
• Defensibility: Segments should be defensible against competition.
• Ability to be served: The company must be able to serve the segment effectively.

Segmentation Criteria

C) Criteria:

• General objective criteria: Demographic, economic, geographic.
• Specific objective criteria: Use of the product, usage scenarios, user category, type of purchase, brand loyalty, point of purchase.
• Subjective criteria — general: Personality and lifestyle.
• Specific subjective criteria: Benefits sought, attitudes, perceptions, preferences.