Requirements for Effective Segmentation There are many ways to segment a market, but not all segmentations are effective. For example,...
Requirements for Effective Segmentation
There are many ways to segment a market, but not all segmentations are effective. For example, buyers of table salt could be divided into black and brown hair customers. But hair color obviously does not affect the purchase of salt. Furthermore, if all salt buyers bought the same amount of salt each month, believed that all salt is the same, and wanted to pay the same price, the company would not benefit from segmenting this market.
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| Effective Segmentation |
To be useful, market segments must be
Measurable
The size, purchasing power, and profiles of the segments can be measured. Certain segmentation variables are difficult to
measure. For example, there are approximately 30.5 million lefthanded people in the United States, which is nearly the entire population of Canada. Yet few products are targeted toward this left-handed segment.
The major problem may be that the segment is hard to identify and measure. There are no data on the demographics of lefties, and the U.S. Census Bureau does not keep track of left handedness in its surveys. Private data companies keep reams of statistics on other demographic segments but not on left-handers.
Accessible
The market segments must be effectively reached and served. Suppose a fragrance company finds that heavy users of its brand are single men and women who stay out late and socialize a lot. Unless this group lives or shops at certain places and is exposed to certain media, its members will be difficult to reach.
Substantial
The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater than seven feet.
Differentiable
The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs.
If men and women respond similarly to marketing efforts for soft drinks, they do not constitute separate segments.
Actionable
Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments, its staff was too small to develop separate marketing programs for each segment.
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