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Market Segmentation - Effective Tool to Capture Opportunity and Edge

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This article will overview the potential of ‘Availing Opportunities through market Segmentation’ by focusing basic types and dimension along with practical examples

One of the most important pillar of marketing strategy is ‘Market Segmentation’ that is dividing a market into distinct groups of buyers with different needs, characteristics, or behaviour that may require separate products and marketing strategies ( Kotler & Armstrong, 1999). The two steps involved in it are first, naming a broad product-market that suits firm’s resources and disaggregating all possible needs into some generic markets. Secondly, segmenting these broad product-markets in order to select specific target markets (Perreault & McCarthy, 2000)


There is an ongoing agreement that no one type of market segmentation is comparatively more effective than the other (, 2006). Industries and companies around the globe has proved that according to firm’s resources, effective utilization of any market segmentation on ‘proactive basis’ has lead to capture profitable opportunities. Many types of segmentation are discussed in literature, however practically, two major types are commonly known as Single- Target Market Approach and Multiple Target-Market Approach.


Companies has gained edge by even adopting ‘ Single Target Market Approach’ that involves segmenting the market and select one of the homogenous segment as the company’s target market ( Quester et al, 2001). Practical examples were also highlighted as, for instance in Australia, National Australia Bank (NAB) and Coles super markets availed edge over competitors by proactively targeting new homogenous target market known as ‘super consumer’. This segment has specific characteristics such as connected to internet, own a mobile phone, spend large amounts on fashion items, go to restaurants and have cable TV subscription. NAB attracted this new segment by offering easy to use online banking service, however, Coles offered 24 hours shopping, comparatively huge range of ‘up-market’ cooked meals and tailor-made fresh food items on demands of super consumer (, 2006).


Similarly company can adopt ‘Multiple Target Market Approach’ that involves choosing two or more market segments and then taking each of them as different a separate target market to develop marketing strategy (Quester et al, 2001). It is also referred as ‘Benefit Segmentation’ where each divided segment is taken as benefit group on the basis of benefits that segment seek from company (Kotler & Armstrong, 1999). Companies also used such segmentation as tool for capturing new opportunities in a effective way. For instance effective service providers in gym industry are realizing that unlike in 1980s where aim of gym membership is to make better appearance is being added by the market concerned with health issues such as heart diseases, posture and BP. So service providers who proactively realized changing trend in market quickly shifted from single market approach to multiple one by offering different products for different groups such as normal fitness services to appearance conscious group and health related expensive services to elite class with high rates (Quester et al, 2001).


Hence the discussion shows that market segmentation is imperative for developing marketing strategy and can be used as an effective tool to gain edge , however key here is adopting ‘ proactive approach’ to realize changing trends.




Kotler, P & Armstrong, G, (1999), ‘Principles of Marketing’, Eight Edition, New Jersey: Prentice- Hall Inc


Quester, P, G, McGuiggan, R, L, McCarthy, E, J & Perreault, W, D (2001), Basic Marketing- A Managerial Perspective’, Australia: McGraw Hill Book Company Australia Pty Limited


Papers For You (2006) "C/M/316. The benefits of segmentation", Available from [19/06/2006]


Papers For You (2006) "K/M/10. Explore the theories surrounding the core marketing principle of Segmentation, Targeting and Positioning", Available from [19/06/2006]


Perreault, W, D & McCarthy, E, J, (2000), ‘Essentials of Marketing- A Global Management Approach’ International Edition, USA: McGraw Hill Companies Inc

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