CustomerNeedsAssessment2.MarketSegmentationOverviewThereisanoldadagethatsuggeststhatifyouputonehandinabucketoficewaterandonehandinabucketofboilingwater,ontheaverageyouwillbecomfortable.Whilethefallacyinthisstatementisevident,theneedtoviewcustomersinwaysotherthan“ontheaverage”isnotalwayssoclear.2.1SegmentationConceptMarketSegmentationisthedegreetowhichthemarketisviewedas:a)anamalgamationofallofitsparts,orb)havingdistinctandaddressablemembersorcomponents.Marketsegmentationisacontinuumrangingfrommassmarketing,inwhicheveryonereceivesthesameproduct/serviceinthesameway,tomicro-marketing,inwhicheachcustomerreceivesindividualtreatment.Theclassicexampleofmassmarketing,i.e.providingthesameproducttoeveryoneregardlessofneed,istypifiedintheattitudeofHenryFord,who,intheearlydaysofautomobileproduction,said,“Theycanhaveanycolortheywant,aslongasit’sblack.”TheMarketSegmentationContinuumMassMicro-Marketing>>>>>>>>>>>>>>>>>>>>>>>>>>>>MarketingSameProductCustomizedProductForAll>>>>>>>>>>>>>>>>>>>>>>>>>>>>ForEachCustomerToday,therearefewerexamplesoftruemassmarketing.Moreprevalentarecompaniesthatusemarketsegmentationtocategorizedcustomersintogroupswithsimilarcharacteristics.Bytreatingthemarketintermsofspecificanddistinctgroupsratherthanasanaverage,companiescompetemoreeffectivelybytailoringtheirproductorserviceofferingstoanumberoftargetmarkets.Virtuallyallindustriesusemarketsegmentationstrategies.Modelsandfeaturesonautomobilesprovideawidevarietyofalternativesforconsumers,airlinesdevisedifferentprogramstoappealtobusinessandleisuretravelers,newspaperstrytounderstandandaddresstheneedsofbothadvertisersandsubscribers.Byidentifyingmarketsegments,theneedsandexpectationsofeachsegmentcanbemorepreciselyaddressed.2.2APracticalApproachThemostcommonapproachtomarketsegmentationissegmentationbytypeofcustomer.Therearemanywaystodividecustomersintogroupswhoseneedscanbefullyunderstoodandmetdependingontheindustry,market,andcircumstances.Mostdecisionsinvolveaskingafewquestionsandusingalittlecommonsensetodeterminewheremeaningfulandaddressabledifferencescanbefound.Manyapproachesrelyonasinglevariableonwhichtogroupcustomers.Typicalexamplesofsegmentationbasedonasinglecriterionaregiveninthefollowingtable.©1995ArthurAndersen&Co.S.C.,Allrightsreserved.2-1CustomerNeedsAssessmentSegmentationExamplesByIndustryIndustrySegmentationCriteriaPossibleSegmentsManufacturerPurchaseHistoryCurrentcustomersFormercustomersProspectivecustomersHospitalsRoleinservicedeliveryIn-patientOut-patientFamilymembersPhysiciansThird-partyprovidersUtilitiesTypeofcustomerResidentialBusinessIndustrialConsumerProductsDistributionchannelroleDistributorRetailerConsumerService/RepairRestaurantTimeofDay/CustomertypeBusinesslunchCateringEarlybirddinersPrime-timedinersRetailerIncomeRangeLowincomeModerateincomeHighincomeFitnessCenterSex/FamilyStatusMalesFemalesSinglesFamiliesByanalyzingtheneeds,expectations,purchasingpatterns,andprofitabilityofvariousmarketsegments,companiescandeterminehowmanysegmentstheycaneffectivelyaddress.Inlargerandmorecomplexmarkets,factor-basedsegmentationcanbeveryuseful.Ratherthanrelyingonintuitiveandclearlydescribabledifferencesbetweencustomergroups,researcherscharacterizealargenumberofcustomersbasedonabatteryofcriteriasuchasincome,lifestyle,age,andevenbuyingpatterns.Throughtheuseofmultivariatestatisticalprocesses,groupsofcustome...
