Role Of Market Segmentation

Explain the roles of market segmentation, market targeting, differentiation, and positioning in implementing an effective marketing strategy.

Strategic planning is dead' long live strategic planning seems like an appropriate way to begin this assignment, for its necessity both to mark passing the old strategic planning and to note the exciting emergence of entirely new approaches (Schewe, C.D. & Hiam, A., 1998, p.25).

Since its birth in the 1950s and 1960s, strategic planning reigned by giving managers a new and exciting set of more marketing-oriented tools for analysis, planning and control. But its growth stalled in 1980s, with many companies abandoning their large planning staffs and forsaking more complex analytic methods and planning processes

Marketing may be based on broad markets or small sub-segments. Mass marketing is the process or strategy to use the same marketing channels for all consumers without identifying the needs of a specific group of people. Mass marketing strategy employs mass promotion, mass production and mass distribution in the same way for mass consumers. In the past, companies have used mass marketing to achieve the economies of scale. However, times have changed, and it is almost impossible to create products to appeal to the entire market. Pursuing this strategy, several companies have lost their market leadership or a considerable chunk of their market share. An example would be Ford Motors when they offered T Model to all buyers "in any color as long as it is black." This is why there is a need of market strategy based on specific groups of customers as buyers’ needs are different; they cannot be satisfied the same way. The division of markets into various sub groups on the basis of several variables will more closely match particular needs of a particular group of consumers (Khan, Q.,

In selecting a targeting strategy, marketers consider a number of factors. For instance, the firm's resources must be substantial if it plans to target several segments. Offering a wider selection of products and marketing programs greatly increases the costs of doing business. By marketing directly to your target market only, you can determine how much your customers are willing to spend on your offerings, how often they’ll need to make purchases, and what you’ll need to do to keep up with changing trends in the future. Target market analysis also ensures that the products or services your company will offer will actually be profitable. To guarantee the success of your company and to avoid wasting valuable time and resources, you need to perform target market analysis (Lisa Selvaggio,