Conditions for Effective Segmentation:
The four important conditions are:
(i) Measurability:
The characteristics of the market segment or the buyers comprising it must be such as to be physically determinable. They must be measurable or quantifiable.
(ii) Accessibility:
The market segment must be accessible through the existing channels of distribution, advertising media, sales force and so on, but all at reasonable cost.
(iii) Substantiability:
The segment must be large enough to be profitable. Conceptually, a firm treats each customer like a separate segment.
(iv) Responsiveness:
It is also necessary that the segment must be willing to react favourably to an appropriate marketing programme. The degree of willingness may vary, but some amount of willingness must be a basic condition.
Basic Approaches:
When a marketer decides to adopt a segmentation strategy, he can adopt either of the two basic approaches or he can combine both into a kind of grid.
These are:
(i) Consumer Characteristics Approach:
This is the oldest form of approach. It consists in identifying established groups of consumers, about whom many things are already known, analysing their characteristics and finding out how these groups differ from others according to their common characteristics.
(ii) Product Approach:
This is a recent origin. It takes up a product and studies its buyers to determine what differences exist between them and its non-buyers. Thus a study may be made on how buyers of brand X differ from those of brand Y.
(iii) Product-Consumer Grid Approach:
This approach is more refined and analytical. It consists in developing a grid on the basis of two important factors, namely, possible products and possible consumer groups and then finding out which particular combination in the grid fits the company’s position.
Advantages:
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