Marketing Strategy and Competitive Positioning pdf ebook

Corporate culture: In some circumstances, customer-benefit segmentation is unaccep-
table to people inside an organisation, because it is not how they understand the world. 
Organisations dominated by strong professional groups frequently have struggles with 
customer-benefit segments – examples are traditional financial service companies and 
professional service firms such as law and accountancy.
● 
Information and reporting: Novel segmentation schemes may not fit with existing infor-
mation systems and reporting systems. This may mean it is difficult to evaluate the worth 
of segment targets, or to allocate responsibilities and monitor performance in doing 
business with them.
● 
Decision-making processes: If segmentation schemes identify new market targets that are 
not recognised in plans (they are not currently part of the served market, they are spread 
across existing segment targets for which responsibility has been allocated, or they are 
subsumed within an existing segment), then they may be ignored in the planning process 
and when plans are implemented. Similarly, segment targets that are not recognised by 
existing resource allocation processes may face difficulty in getting a marketing budget. 
We should examine carefully how a new segmentation approach can be integrated with 
planning and budgeting and in evaluation systems.
● 
Corporate capabilities: It is all too easy for marketing researchers and analysts to develop 
attractive market targets, but a company may have little basis for achieving a competitive 
advantage simply because it lacks the capabilities for dealing with this type of customer 
(see Chapter 6).
● 
Operational systems: Segmentation strategy may fail because it underestimates the prob-
lems faced at the operational level in translating segmentation strategy into effective real-
ity. Can salespeople deal with this target customer? Do we have access to the distribution 
channels we need? Do we have the expertise to develop and operate segment-based 
advertising and promotion? Do we have market research organised around the segment 
targets so that we can identify them, measure opportunities and evaluate progress? Do 
we have the technical facilities to price differently to different customer types if this is 
required? We should look very carefully at the operational capabilities we have in sales, 
advertising, promotion and distribution, and question their ability to adapt to a new 
segmentation-based strategy.
Many of these issues are covert and hidden inside the organisation, yet to ignore them 
is to place the strategy at risk. One proposal is that in addition to the conventional evalua-
tion of market targets, each potential target should be tested for internal compatibility, as 
suggested in Figure 7.6.

---

198