Segment marketing offers several benefits, which include the following:
(a) The company can create a more fine-tuned product or service offer and price it appropriately for the target audience.
(b) The choice of distribution channels and communication channels becomes much easier.
(c) Such a company may face few competitors if fewer competitors are focusing on this market segment.
(d) Segmentation helps a company to exploit its market better by selecting market niches (suitable segments) that are compatible with its resources.
(e) Segmentation helps in focusing strategies more sharply on target groups.
(f) Segmentation is more likely to result in instilling customers’loyalty since the firm’s offering is better matched to those in the segment.
(1) Measurability: The size, purchasing power and profiles of the segments should be measurable. However, certain segmentation variables are difficult to measure. For example, Kotler (1997) reported that there were 24 million left-handed people in the United States – almost equalling the entire population of Canada. Yet few products were targeted towards this segment. The major problem may be that the segment is hard to identify and measure.
(2)Accessibility: The market segments should be effectively reached and served. Suppose a perfume company finds that heavy users of its brand are single men, who stay out late and socialise a lot. Unless this group lives or shops at certain places and exposed to certain media, its members will be difficult to reach.
(3)Substitutability: The market segments should be large or profitable enough to be served. A segment should be the largest possible homogeneous group worth pursuing with tailored marketing programmes.
(4) Actionability: Effective programmes should be designed in order to be attractive and to serve the segment(s) better. A case of this
(a) The company can create a more fine-tuned product or service offer and price it appropriately for the target audience.
(b) The choice of distribution channels and communication channels becomes much easier.
(c) Such a company may face few competitors if fewer competitors are focusing on this market segment.
(d) Segmentation helps a company to exploit its market better by selecting market niches (suitable segments) that are compatible with its resources.
(e) Segmentation helps in focusing strategies more sharply on target groups.
(f) Segmentation is more likely to result in instilling customers’loyalty since the firm’s offering is better matched to those in the segment.
Conditions for Effective Segmentation
There are many ways to segment a market but not all segmentations are effective. However, to be useful, market segments must have the following characteristics:(1) Measurability: The size, purchasing power and profiles of the segments should be measurable. However, certain segmentation variables are difficult to measure. For example, Kotler (1997) reported that there were 24 million left-handed people in the United States – almost equalling the entire population of Canada. Yet few products were targeted towards this segment. The major problem may be that the segment is hard to identify and measure.
(2)Accessibility: The market segments should be effectively reached and served. Suppose a perfume company finds that heavy users of its brand are single men, who stay out late and socialise a lot. Unless this group lives or shops at certain places and exposed to certain media, its members will be difficult to reach.
(3)Substitutability: The market segments should be large or profitable enough to be served. A segment should be the largest possible homogeneous group worth pursuing with tailored marketing programmes.
(4) Actionability: Effective programmes should be designed in order to be attractive and to serve the segment(s) better. A case of this
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