Sometimes the segment has to be changed over time to remain sustainable and

Sometimes the segment has to be changed over time to

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the same. Sometimes the segment has to be changed over time to remain sustainable and significant in the market. This ensures that the segmentation can be easily implemented and acted upon. Some common characteristics of an actionable plan are- 1. Distinctiveness- The response to marketing mix by different groups is unique 2. Identity- The customer profile should be easily identifiable in different segments 3. Adequate Size- The size of different groups should be large enough to be viable Identifying the segmentation variables to be used is very important. Variables used for segmentation can be the characteristics of a person, groups, or organizations used to divide the market into different segments. The variables must be relatable to the needs, uses and behavior towards the products. These variables for consumer/customer markets can be divided into following categories: Demographic- Age, Income, Gender, Ethnicity Geographic- Market density, Climate, Location, Population Psychographic- Personality traits, Lifestyles, Motives Behavioristic- Usage volume, Frequency, Benefits sought, Brand loyalty, Price sensitivity Consumer market segmentation identifies groups within the market that respond similarly to the marketing mix. In case of organizational markets the objective is similar with a difference that
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instead of groups of individuals, coherent groups of organizations are to be identified. The characteristics of organizational markets are Organizational Size- The variables used can be number of employees, production volume, or annual turnover depending on its application Ex- Company selling training course will be interested in number of employees Industry Sector- It is generally measured in informal way by referring to the industry name or sector name, like ‘banking sector’ or ‘production industry’ Geographical Location- It can simply be referred to geographic segmentation in terms of ‘domestic’ or ‘export’ markets There are two distinct segmentation strategies widely used by companies and industries worldwide. These are 1. Focus Strategy- This strategy focuses all its resources and marketing strategies on a single segment. The idea is to become a dominant force in this segment alone. Walmart is an excellent example of a company that used Focus strategy in initial years to become successful. Walmart started its operations by focusing on small cities with population less than 25,000. These cities were situated in eleven south central states, a segment often neglected by other competitors of Walmart. This strategy of focus on rural locations was responsible for success of Walmart and also instrumental in development of Sustainable Competitive Advantages over the competition. 2. Multiple Segment Strategy-This involves multiple segments in the strategy process. It helps to be successful in different segments at the same time.
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