Explain the requirements for successful /effective segmentation.

1) Identifiability/ Distinctiveness/ Differentiability. Any segment defined has to be distinctive or significantly different from any other segment i.e. the market segments have to be that diverse that they show different reactions to different marketing mixes. It has to be different in its response to a marketing mix. The means that:
o One segment should be easily differentiated from another;
o It should be distinct from others and the people therein should react differently from other segments towards a marketing mix program;
o Clear differences in consumer want, needs and preferences for the product must exist across segments.
o Homogeneity within the segment; Heterogeneity with other segments
Without significant differences, segment boundaries become too blurred, and there is the risk that an organization’s offerings will not be sufficiently well tailored to attract the required customers. Some common characteristics to identify a market segment include: Geographical (Regions, Countries, Cities or Towns), demographic (age, gender, education, social Status ) and behavioural (purchase pattern, usage rate, brand loyalty, price sensitivity)
2) Measurability. The segment should be measurable in term of the total size, purchasing power and,
demographic, geographic and psychographic characteristics. A defined segment must be of a sufficient size to make its pursuit worthwhile – size and purchasing power (income) of the segment’s can be measured i.e. segment is large enough to be profitable . It has to be possible to determine the values of the variables used for segmentation with justifiable efforts.
3) Substantial . The market size of the segment should be of sufficient size so as to generate profits; it should also have a potential for growth. The size and profit potential of a market segment have to be large enough to economically justify separate marketing activities for this segment or the segment must be sufficiently large, with substantial potential to generate desired revenue and profit levels.
4) Accessibility – A defined segment has to be accessible in order to be served, in terms of promotion, communication and distribution channels . The segment has to be accessible and servable for the organization. This means that the segment should be reachable and easy to enter or penetrate and the marketers must be able to deliver the product or service offering and must be able to operate therein.
5) Dependability/ actionability –- It should be possible to design a marketing program directed towards that segment and serve it effectively and efficiently. The marketer should be able to react to the need, wants and preferences of the segment with the appropriate marketing mix.
It concerns the degree to which effective programs can be formulated for attracting and serving the segment. In choosing segments therefore, it is important to consider whether the organization can develop a sufficiently strong differential advantage to defend its presence in that segment against competitive incisions. The segment has to feasible to make it possible to approach each segment with a particular marketing program and to draw advantages from that.
6) Stability (not changing too quickly). Characteristics of the segment are relatively stable and consistent over a long period. Segmentation is a long-term strategy, consistent with the organization’s mission and long-term corporate objectives. Markets characterized by volatility and uncertainty make it difficult to forecast demand patterns and plan future actions. Ensure that the targeted market segment is stable and consistent over a long period of term to allow long-term planning. For example, low to middle-income group customers in a fast developing country may be getting more affluent quickly, and that might likely change their spending habits and behaviors. Is your targeted customers residing in areas that are prone to political unrest or unexpected natural disasters? These can damage the economic structures adversely and as such affect the inherent behavior of your market segment.

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Lellah answered the question on November 5, 2021 at 07:56