Description
This is a segment of the Literature Review chapter of a working paper titled, "Introducing Sugar Cane Juice in the Foreign Market- A Thorough Market Potential". The paper entails a detailed analysis of the market segment strategy for the betterment of understanding and ensuring essentials in considering the right customer class to push the natural product to.
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
62
IJSTR©2012
www.ijstr.org
Critical Analysis of Segmentation Strategy For
Potential Product Launch - Mapping The
Customers
Mostofa Jaman
Abstract:- This is a segment of the Literature Review chapter of a working paper titled, “Introducing Sugar Cane Juice in the Foreign Market- A
Thorough Market Potential”. The paper entails a detailed analysis of the market segment strategy for the betterment of understanding and ensuring
essentials in considering the right customer class to push the natural product to. The report is still in fiel d level and data are collected from several
districts in Bangladesh and surveys are being done to facilitate potential foreign buyers looking to import.
Key Words:- Segmentation, Market, Marketing, Consumers, Brand, Product, Strategy
1.1. FOREGROUND
As the most prominent expert of marketing would say, “today’s
central problem facing business is not a shortage of goods but
a shortage of customers... Marketing is an answer to how
compete on bases other than price” (Kotler, 2003). As David
Tarantino (2003) wrote, in order to develop marketing strategy,
three components should be clearly defined:
“Segmentation or who can I sell my services to?”
Targeting or Who I am going to sell my services to?
Positioning or How I am going to sell my services?”
Richard M.S. Wilson and Collin Gilligan (2005) in their book of
“Strategic Marketing Management, planning implementation
and control” introduce the eight stages of segmentation,
targeting and positioning process: At the first stage, it is
important to identify the company’s current position, its
objectives, capabilities of development according to resources
and constraints that the company face. According to the
authors’ view, these two stages are recognised together as
situation analyses phase. The next, third stage will be
identification of segmentation variables and segment the
market. In addition to this, fourth stage is developing each
segment and these are related to marketing segmentation
phase. Following fourth and fifth stages are known as
marketing targeting, which infers evaluating the potential and
attractiveness of all segments identified before. After which
comes selection of the target market or markets in order to
concentrate on these markets more in detail. After the target
markets are selected, then comes product positioning
phase. Under the product positioning issue authors bring the
term of “concept.” They state that each target segment should
be conceptualised in terms of positioning. Which means that
for each segment correct positioning concept should be
identified. Hence, developing some alternative positioning
concepts and selection of the most appropriate one is crucial.
Final phase is to develop marketing mix taking into
consideration such variables as product, price, place and
promotion.
Many authors in the academic works state that some
companies still have difficulties to understand whether they
need above mentioned strategies or not. Yet, even having a
great concern and awareness, some companies still fail in
terms of market segmentation, targeting, positioning and
marketing mix strategies. Investigation of academic theories,
will help to find out whether segmentation is important or not
for a product and which is the most viable segment and what
actions should be done further.
1.2. MARKET SEGMENTATION
1.2.1. INTRODUCTION
Citing the words of Bonnie Gretzner (2007), “If you don't
understand the details about customer segmentation, you're
most likely letting customers--and sales--slip through your
fingers,” says one expert. Nowadays, in customer-oriented
era, companies attempt to break down markets into
manageable parts of the consumer groups and treat them
according to the similar characteristics, that are called market
segmentation. In this sense, Geoff Lancaster and Paul
Reynolds (2002) in the book of “Marketing,” state that
increased competition, better informed and educated
customers, and constant changing demands, urge companies
to pay attention to segmentation issues. Segmentation has two
approaches depending on who are your customers:
segmenting organisational market and segmenting consumer
market. As the study is undertaken on consumer product,
looking at the bottled water in particular, natural mineral water
consumers, therefore organisational market segmentation will
not be discussed accordingly. On the website of the American
Marketing Association, William D. Neal (2008) in the article of
”Principles of Marketing Segmentation” describes two ways of
market segmentation: a priori and post hoc. A priori market
segmentation is based on adoption already known and usually
used technique of segmentation. In this case, companies do
not conduct any research in order to identify which segment is
most appropriate, but they simply chose specific segmentation
approach. On the other hand, post hoc segmentation infers
market segmentation based on the thorough research of the
customers’ evidences that come up as variables, will become
a background of the segmentation. Author recommends not
using a priori segmentation as an ease job in order not to
conduct a research. As he states, due to dynamic society,” a
miss-segmented market is often worse for the firm than the
mass-market assumption”. Whereby, Mr. Neal depicts main
variables, which should be considered for the research
________________________
Mostofa Jaman is a Lecturer of Management at the
American International University- Bangladesh and also
an Entrepreneur in the catering industry in Bangladesh.
Email: [email protected]
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
63
IJSTR©2012
www.ijstr.org
purposes. These set of variables are: product attribute
preferences; values; product purchase pattern; product usage
pattern; product benefits; brand preference; price sensitivity;
brand loyalty; lifestyle; status; attitudes and opinions toward
environment etc. Market segmentation, according to Frances
Brassington and Stephen Pettit (1997) is important issue for
any business, because customers or segments have different
characteristics and preferences and these preferences are
defined as variables, which must be considered by companies.
Therefore, segmentation is a stage when the company
identifies all clusters of possible consumers by grouping those
consumers based on same needs, demands, requirements
and other different characteristics. That consequently will
become the pool of options to be targeted according
attractiveness of the market(s).
1.2.2. TYPES OF MARKET SEGMENTATION
Some basic segmentation methods will be discussed in order
to identify alternatives for the following consideration, which is
the most appropriate for the natural Sugar Cane juice.
Geographic segmentation means to define customers
according the location they live, for instance, European
consumers. Geographical segmentation is very easy to define.
It is easy for distribution system and establishing contacts with
customers. But, the drawback of this kind of segmentation, as
Douglas and Craig state in the book of “Principles of
marketing” cited by F. Brassington and S. Pettite (1997), that
concentrating only on the geographical area is not correct,
because even in a small location customers can have diverse
wants and needs. For example, in UK, people consider hot
chocolate as a substitute to the coffee or tea and the bedtime
drink. However, French consumers see the hot chocolate as a
nourishing breakfast served with milk for children. Therefore,
in addition to that it is important to make customer-focused
segmentation.
Demographic segmentation is deeper approach than
geographic segmentation. It is concentrated on age, gender,
race, income, occupation etc. Demographic segmentation is
as easy to define as geographic. It is measurable as well and
information can be accessible free. Advantage of demographic
approach of segmentation, let us say age, is ease to make a
profile of an age segment and according to that decide which
strategy of communication and creative approach will be the
most appropriate. On the other hand, similar to geographic
segmentation, not all the customers in the same demographic
range necessarily have the same needs and wants.
Geo-demographic segmentation is a merger of above
mentioned. For instance, if the wine company is selling old
drinks in expensive price, company should know that some
areas are populated with inhabitants of high income and some
areas are poor.
Psychographic segmentation or lifestyle segmentation is
more complicated segmentation method than mentioned
above. F. Brassington and S. Pettitt (1997) define lifestyle
segment as it is not based on the product’s best qualities and
the same issues but it is oriented towards customer’s
emotional state, paying more attention on the benefits, which
can be given to the customer. As Geoff Lancaster et al. (2002),
describe psychographic and lifestyle segmentation it is about
how individuals spend time and money based on the
personality, attitudes, education, cultural and social
background. Authors recognise early 1970s, J.T. Plummer’s
idea of identification of this phenomenon based on the next
measures:
How individuals spend their time on activities;
Their major interests;
Their opinions about themselves and the world in
general
On the figure 2.2, Peter Cheverton in his book introduces UK
lifestyle segmentation according to Martin Christopher
Malcolm McDonald, 1995, who distinguish types of lifestyle
and divides according to percentage. One of the psychological
segmentation is behavioural segmentation, which considers
separation of the customers according to their knowledge,
attitudes, responses and uses of the product. P. Kotler and G.
Armstrong (2006) introduce five different varieties of
segmentation. Whereby, the first form of segmentation is
occasional segmentation. It means that segmentation is done
according the particular product usage. For example, Kotler
and Armstrong bring an example of the orange juice
producers, who encouraged drinking orange juice not only
during the breakfast, but also consume at other times as well.
Second type is benefit segmentation, looking at the benefits,
which can be delivered to the customer according the
attributes of the product. For example, tooth companies
producing tooth paste for customers concerned to buy such
tooth paste, which are effective for sensitive teeth with
whitening features, etc. Benefit sought by Frances Brasington
and Stephen Pettitt (2003) is seen in two scopes one is
practical though (e.g. reliability, economic, etc.) and
psychographically oriented (e.g. environmentally friendly, fast,
healthier, etc.). In addition to that, according to Harvard
Business Note (2000) segmentation is differentiated into two
types: benefit segmentation and segmentation based on
observable characteristics. Benefit segmentation can be
divided into two parts, people who pay more attention on the
results rather than side effects and people who are concerned
on the gentleness of the product, avoiding side effects and
concentrated on the results. Third type is user status
segmentation, dividing consumers into the nonusers, ex-users,
potential users, first-time users and regular users. There is
also another form of segmentation based on usage bat it pays
attention on the usage rate. It means that consumers are
differentiated on the frequency or intensity of usage a product,
in particular, light, medium and heavy users. The final, fifth
method is studying customers based on the loyalty status,
according which companies look at degree of loyalty towards
company, product etc. Strong loyal customers are most
targeted people by the companies whose service or product is
attractive to the customers and try to sustain them by using
different marketing programmes. On the other hand, not loyal
or partially loyal customers can be targeted by other rival
companies in order to take away them from competitors. On
that basis, accordingly, loyalty segmentation can be divided
into two categories: brand loyal and switchers. Some authors
state that in some cases segmentation according to single
variable is not enough. According the Harvard publication
(2006) is introduced multifactor segmentation approach, when
three factors are used to identify segment in “three-
dimensions”. An example is given to show visually as how can
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
64
IJSTR©2012
www.ijstr.org
Figure 2.4.: The AIDA response
hierarchy model
be seen identified man of particular age and income for a
certain golf sportswear (Figure 2.3).
Figure 1.3.: Multifactor segmentation, 2006
Selected gray boxes on the figure above, visually exhibit the
men under age of 50-70 and income 50$K and more. Thus,
using multifactor segmentation of needed factors will lead to
exactly needed segment. Frances Brassington and Stephen
Pettitt (2003) introduce the AIDA response hierarchy model
(Figure 2.4). According that model, they make segmentation of
Buyer readiness stage. They claim that on the early stage,
when customers are not nor aware of the product existence it
is possible to attract them by increasing product awareness
and “stimulate interest in the product”. The information needs
to be delivered to the customer in order to clearly understand
the essence of the product, which will urge the desire and
stimulate the drive to act to buy.
1.2.3. PRINCIPAL REQUIREMENT FOR SEGMENTATION
Revising different authors’ views about segmentation, gives
possibility to come up to the principal criterions for marketing
segmentation. First of all, segment must exist and not to be an
object of the marketers’ imagination. Existing market must be
measurable or identifiable in terms of size and purchasing
power. Yet, this requirement in most occasions is difficult to
comply, because census data do not exist. Following
requirement is differentiability. It means that segment is
distinguished and responds to the different marketing mix and
other incentives in a changing way. For example, if married
and unmarried women respond similarly to a new perfume, it
means that they are within the same segment. Obviously,
segment must be accessible or reachable in order to establish
connection. On the other hand, in terms of business
prospective segment must be substantial and stable for a
significantly long period. Under this requirement is mentioned
that tailored marketing program should be targeted to the
significant amount of people with the same needs and
characteristics. In addition to that, amount should be such a
big that business should be profitable. And, final requirement is
actionable criterion, which concludes company’s capability to
deal with so many segments as it is possible from the
company’s extent of resources (Kotler, Armstrong, 2006;
Green and Tull, 1978; cited by Neal, 2008). Due to the correct
market segmentation, company can benefit from distribution
point of view, carry out business in an effective and efficient
way, increase sales/profit and market share. However, market
segmentation becomes a dilemma for the company, because
of different reasons, such as incorrect formulation of marketing
strategy, incorrect understanding of the customers behaviour
regarding to the marketing mix, more theoretical rather than
practical approach choosing wrong variables.
Conclusion:
It is essential for any booming market to take their
segmentation strategy very seriously before thinking of
expansion. Internationalization strategy calls for thorough
mapping of the potential customers in order to bridge the gap
of market imperfection. There is a vast difference between
strategies targeted for beverages and any other industrial
produce. Marketers can never draw conclusion on one
specific criterion to target the potential market. Hence,
analysing segmentation strategy is not conclusive rather a
progressive strategy for identifying the target market.
BIBLIOGRAPHY
[1] Andersen, A.R., (2002), Marketing Research, Jossey-
Bass, San Francisco
[2] Boone, L.E., Kurtz D.L. (2005), Contemporary
Marketing, Thomson, South-West, USA
[3] Hollensen, S. (2003), Marketing Management, A
Relationship Approach, Pierson Education Limited,
Essex
[4] Kotler, P. (2008), The New Strategic Brand
Management (4
th
edition), Kogan Pages Limited,
London
[5] Kotler, P., Armstrong, G., Saunders, J. and Wong, V.
(1999) Principles of Marketing (3
rd
edition), Prentice
Hall Inc., Milan
[6] Lambin, J.J. (2000), Marketing-Driven Management,
Strategic and Operational Management, Palgrave,
New York
[7] Marczyk, G., DeMatteo, D. and Festinger, D. (2005),
Essentials of Research Design and Methodology,
John Wiley and Sons, Inc, New Jersey
[8] Russ, F.A., Kirkpatrick C.A. (1982), Marketing, Little,
Brown & Company Limited, Canada
[9] Sutton, D., Klein, T. (2003), Enterprise Marketing
Management, Wiley and Sons, Inc, New Jersey
[10] O’Shaughnessy, J. (1995), Competitive Marketing, A
Strategic Approach (3
rd
edition), Clays Ltd., Great
Britain
Awarenes
s
Interest
Desire
Action
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
65
IJSTR©2012
www.ijstr.org
[11] Warren, J., Keegan, M. C. Green, (2005), Global
Marketing, (4
th
edition), Pearson, Prentice Hall, USA
[12] Wilmshurst, J., Mackay A. (2002), The Fundamentals
and Practice of Marketing, (4
th
edition), Butterworth-
Heinemann, Oxford
[13] Winer, R.S. (2004), Marketing Management (2
nd
edition), Pierson, Prentice Hall, New Jersey
[14] Belch, G.E., Belch, M.A. (2003), Advertising and
Promotion, (6
th
edition), Mc Grow-Hill,
[15] Research and Markets: The UK water cooler industry
faces the challenge of increased competition in 2006,
M2 Presswire, Gale Group
[16] Datamonitor, Carbonated Soft Drinks in the United
Kingdom, industry profile, (2007), Reference code:
01830028
[17] Moore, P. (2006), Promoting Your Brand, NZ Business
[18] Getting Right Marketing Mix, (2006), The Press,
Groovy Glasses Ltd, Pilot Consulting Group
[19] Cohen, E. (1998), How to Target Smarter, Target
Marketing, North American Publishing Company
[20] Paddison, N. (2002), Responding to Market Trends
With Predictive Segmentation, Health management
technology, Nelson Publishing, Farmington Hills,
Michigan
[21] Marshal, L. (2007), Today’s niche market is about
narrow, not small, Vol. 78 Issue 23, p30-32, 2p,
EBSCO, Marketing, source retrieved on May 5
th
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2008, from:
http://web.ebscohost.com/ehost/detail?vid=1&hid=106
&sid=ea4df285-5644-4210-959d-
2f97949cf4f6%40sessionmgr109
[22] Segmentation: thin edge of the marketing wedge,
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adf1353c95d3%40sessionmgr107
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sid=fefe27de-dcc5-48ad-b58e-
85857f12f274%40sessionmgr103
doc_327282681.pdf
This is a segment of the Literature Review chapter of a working paper titled, "Introducing Sugar Cane Juice in the Foreign Market- A Thorough Market Potential". The paper entails a detailed analysis of the market segment strategy for the betterment of understanding and ensuring essentials in considering the right customer class to push the natural product to.
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
62
IJSTR©2012
www.ijstr.org
Critical Analysis of Segmentation Strategy For
Potential Product Launch - Mapping The
Customers
Mostofa Jaman
Abstract:- This is a segment of the Literature Review chapter of a working paper titled, “Introducing Sugar Cane Juice in the Foreign Market- A
Thorough Market Potential”. The paper entails a detailed analysis of the market segment strategy for the betterment of understanding and ensuring
essentials in considering the right customer class to push the natural product to. The report is still in fiel d level and data are collected from several
districts in Bangladesh and surveys are being done to facilitate potential foreign buyers looking to import.
Key Words:- Segmentation, Market, Marketing, Consumers, Brand, Product, Strategy
1.1. FOREGROUND
As the most prominent expert of marketing would say, “today’s
central problem facing business is not a shortage of goods but
a shortage of customers... Marketing is an answer to how
compete on bases other than price” (Kotler, 2003). As David
Tarantino (2003) wrote, in order to develop marketing strategy,
three components should be clearly defined:
“Segmentation or who can I sell my services to?”
Targeting or Who I am going to sell my services to?
Positioning or How I am going to sell my services?”
Richard M.S. Wilson and Collin Gilligan (2005) in their book of
“Strategic Marketing Management, planning implementation
and control” introduce the eight stages of segmentation,
targeting and positioning process: At the first stage, it is
important to identify the company’s current position, its
objectives, capabilities of development according to resources
and constraints that the company face. According to the
authors’ view, these two stages are recognised together as
situation analyses phase. The next, third stage will be
identification of segmentation variables and segment the
market. In addition to this, fourth stage is developing each
segment and these are related to marketing segmentation
phase. Following fourth and fifth stages are known as
marketing targeting, which infers evaluating the potential and
attractiveness of all segments identified before. After which
comes selection of the target market or markets in order to
concentrate on these markets more in detail. After the target
markets are selected, then comes product positioning
phase. Under the product positioning issue authors bring the
term of “concept.” They state that each target segment should
be conceptualised in terms of positioning. Which means that
for each segment correct positioning concept should be
identified. Hence, developing some alternative positioning
concepts and selection of the most appropriate one is crucial.
Final phase is to develop marketing mix taking into
consideration such variables as product, price, place and
promotion.
Many authors in the academic works state that some
companies still have difficulties to understand whether they
need above mentioned strategies or not. Yet, even having a
great concern and awareness, some companies still fail in
terms of market segmentation, targeting, positioning and
marketing mix strategies. Investigation of academic theories,
will help to find out whether segmentation is important or not
for a product and which is the most viable segment and what
actions should be done further.
1.2. MARKET SEGMENTATION
1.2.1. INTRODUCTION
Citing the words of Bonnie Gretzner (2007), “If you don't
understand the details about customer segmentation, you're
most likely letting customers--and sales--slip through your
fingers,” says one expert. Nowadays, in customer-oriented
era, companies attempt to break down markets into
manageable parts of the consumer groups and treat them
according to the similar characteristics, that are called market
segmentation. In this sense, Geoff Lancaster and Paul
Reynolds (2002) in the book of “Marketing,” state that
increased competition, better informed and educated
customers, and constant changing demands, urge companies
to pay attention to segmentation issues. Segmentation has two
approaches depending on who are your customers:
segmenting organisational market and segmenting consumer
market. As the study is undertaken on consumer product,
looking at the bottled water in particular, natural mineral water
consumers, therefore organisational market segmentation will
not be discussed accordingly. On the website of the American
Marketing Association, William D. Neal (2008) in the article of
”Principles of Marketing Segmentation” describes two ways of
market segmentation: a priori and post hoc. A priori market
segmentation is based on adoption already known and usually
used technique of segmentation. In this case, companies do
not conduct any research in order to identify which segment is
most appropriate, but they simply chose specific segmentation
approach. On the other hand, post hoc segmentation infers
market segmentation based on the thorough research of the
customers’ evidences that come up as variables, will become
a background of the segmentation. Author recommends not
using a priori segmentation as an ease job in order not to
conduct a research. As he states, due to dynamic society,” a
miss-segmented market is often worse for the firm than the
mass-market assumption”. Whereby, Mr. Neal depicts main
variables, which should be considered for the research
________________________
Mostofa Jaman is a Lecturer of Management at the
American International University- Bangladesh and also
an Entrepreneur in the catering industry in Bangladesh.
Email: [email protected]
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
63
IJSTR©2012
www.ijstr.org
purposes. These set of variables are: product attribute
preferences; values; product purchase pattern; product usage
pattern; product benefits; brand preference; price sensitivity;
brand loyalty; lifestyle; status; attitudes and opinions toward
environment etc. Market segmentation, according to Frances
Brassington and Stephen Pettit (1997) is important issue for
any business, because customers or segments have different
characteristics and preferences and these preferences are
defined as variables, which must be considered by companies.
Therefore, segmentation is a stage when the company
identifies all clusters of possible consumers by grouping those
consumers based on same needs, demands, requirements
and other different characteristics. That consequently will
become the pool of options to be targeted according
attractiveness of the market(s).
1.2.2. TYPES OF MARKET SEGMENTATION
Some basic segmentation methods will be discussed in order
to identify alternatives for the following consideration, which is
the most appropriate for the natural Sugar Cane juice.
Geographic segmentation means to define customers
according the location they live, for instance, European
consumers. Geographical segmentation is very easy to define.
It is easy for distribution system and establishing contacts with
customers. But, the drawback of this kind of segmentation, as
Douglas and Craig state in the book of “Principles of
marketing” cited by F. Brassington and S. Pettite (1997), that
concentrating only on the geographical area is not correct,
because even in a small location customers can have diverse
wants and needs. For example, in UK, people consider hot
chocolate as a substitute to the coffee or tea and the bedtime
drink. However, French consumers see the hot chocolate as a
nourishing breakfast served with milk for children. Therefore,
in addition to that it is important to make customer-focused
segmentation.
Demographic segmentation is deeper approach than
geographic segmentation. It is concentrated on age, gender,
race, income, occupation etc. Demographic segmentation is
as easy to define as geographic. It is measurable as well and
information can be accessible free. Advantage of demographic
approach of segmentation, let us say age, is ease to make a
profile of an age segment and according to that decide which
strategy of communication and creative approach will be the
most appropriate. On the other hand, similar to geographic
segmentation, not all the customers in the same demographic
range necessarily have the same needs and wants.
Geo-demographic segmentation is a merger of above
mentioned. For instance, if the wine company is selling old
drinks in expensive price, company should know that some
areas are populated with inhabitants of high income and some
areas are poor.
Psychographic segmentation or lifestyle segmentation is
more complicated segmentation method than mentioned
above. F. Brassington and S. Pettitt (1997) define lifestyle
segment as it is not based on the product’s best qualities and
the same issues but it is oriented towards customer’s
emotional state, paying more attention on the benefits, which
can be given to the customer. As Geoff Lancaster et al. (2002),
describe psychographic and lifestyle segmentation it is about
how individuals spend time and money based on the
personality, attitudes, education, cultural and social
background. Authors recognise early 1970s, J.T. Plummer’s
idea of identification of this phenomenon based on the next
measures:
How individuals spend their time on activities;
Their major interests;
Their opinions about themselves and the world in
general
On the figure 2.2, Peter Cheverton in his book introduces UK
lifestyle segmentation according to Martin Christopher
Malcolm McDonald, 1995, who distinguish types of lifestyle
and divides according to percentage. One of the psychological
segmentation is behavioural segmentation, which considers
separation of the customers according to their knowledge,
attitudes, responses and uses of the product. P. Kotler and G.
Armstrong (2006) introduce five different varieties of
segmentation. Whereby, the first form of segmentation is
occasional segmentation. It means that segmentation is done
according the particular product usage. For example, Kotler
and Armstrong bring an example of the orange juice
producers, who encouraged drinking orange juice not only
during the breakfast, but also consume at other times as well.
Second type is benefit segmentation, looking at the benefits,
which can be delivered to the customer according the
attributes of the product. For example, tooth companies
producing tooth paste for customers concerned to buy such
tooth paste, which are effective for sensitive teeth with
whitening features, etc. Benefit sought by Frances Brasington
and Stephen Pettitt (2003) is seen in two scopes one is
practical though (e.g. reliability, economic, etc.) and
psychographically oriented (e.g. environmentally friendly, fast,
healthier, etc.). In addition to that, according to Harvard
Business Note (2000) segmentation is differentiated into two
types: benefit segmentation and segmentation based on
observable characteristics. Benefit segmentation can be
divided into two parts, people who pay more attention on the
results rather than side effects and people who are concerned
on the gentleness of the product, avoiding side effects and
concentrated on the results. Third type is user status
segmentation, dividing consumers into the nonusers, ex-users,
potential users, first-time users and regular users. There is
also another form of segmentation based on usage bat it pays
attention on the usage rate. It means that consumers are
differentiated on the frequency or intensity of usage a product,
in particular, light, medium and heavy users. The final, fifth
method is studying customers based on the loyalty status,
according which companies look at degree of loyalty towards
company, product etc. Strong loyal customers are most
targeted people by the companies whose service or product is
attractive to the customers and try to sustain them by using
different marketing programmes. On the other hand, not loyal
or partially loyal customers can be targeted by other rival
companies in order to take away them from competitors. On
that basis, accordingly, loyalty segmentation can be divided
into two categories: brand loyal and switchers. Some authors
state that in some cases segmentation according to single
variable is not enough. According the Harvard publication
(2006) is introduced multifactor segmentation approach, when
three factors are used to identify segment in “three-
dimensions”. An example is given to show visually as how can
INTERNATIONAL JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH VOLUME 1, ISSUE 11, DECEMBER 2012 ISSN 2277-8616
64
IJSTR©2012
www.ijstr.org
Figure 2.4.: The AIDA response
hierarchy model
be seen identified man of particular age and income for a
certain golf sportswear (Figure 2.3).
Figure 1.3.: Multifactor segmentation, 2006
Selected gray boxes on the figure above, visually exhibit the
men under age of 50-70 and income 50$K and more. Thus,
using multifactor segmentation of needed factors will lead to
exactly needed segment. Frances Brassington and Stephen
Pettitt (2003) introduce the AIDA response hierarchy model
(Figure 2.4). According that model, they make segmentation of
Buyer readiness stage. They claim that on the early stage,
when customers are not nor aware of the product existence it
is possible to attract them by increasing product awareness
and “stimulate interest in the product”. The information needs
to be delivered to the customer in order to clearly understand
the essence of the product, which will urge the desire and
stimulate the drive to act to buy.
1.2.3. PRINCIPAL REQUIREMENT FOR SEGMENTATION
Revising different authors’ views about segmentation, gives
possibility to come up to the principal criterions for marketing
segmentation. First of all, segment must exist and not to be an
object of the marketers’ imagination. Existing market must be
measurable or identifiable in terms of size and purchasing
power. Yet, this requirement in most occasions is difficult to
comply, because census data do not exist. Following
requirement is differentiability. It means that segment is
distinguished and responds to the different marketing mix and
other incentives in a changing way. For example, if married
and unmarried women respond similarly to a new perfume, it
means that they are within the same segment. Obviously,
segment must be accessible or reachable in order to establish
connection. On the other hand, in terms of business
prospective segment must be substantial and stable for a
significantly long period. Under this requirement is mentioned
that tailored marketing program should be targeted to the
significant amount of people with the same needs and
characteristics. In addition to that, amount should be such a
big that business should be profitable. And, final requirement is
actionable criterion, which concludes company’s capability to
deal with so many segments as it is possible from the
company’s extent of resources (Kotler, Armstrong, 2006;
Green and Tull, 1978; cited by Neal, 2008). Due to the correct
market segmentation, company can benefit from distribution
point of view, carry out business in an effective and efficient
way, increase sales/profit and market share. However, market
segmentation becomes a dilemma for the company, because
of different reasons, such as incorrect formulation of marketing
strategy, incorrect understanding of the customers behaviour
regarding to the marketing mix, more theoretical rather than
practical approach choosing wrong variables.
Conclusion:
It is essential for any booming market to take their
segmentation strategy very seriously before thinking of
expansion. Internationalization strategy calls for thorough
mapping of the potential customers in order to bridge the gap
of market imperfection. There is a vast difference between
strategies targeted for beverages and any other industrial
produce. Marketers can never draw conclusion on one
specific criterion to target the potential market. Hence,
analysing segmentation strategy is not conclusive rather a
progressive strategy for identifying the target market.
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