Business

19t7,1, No. 3. 301-335

Market Segmentation
A. Caroline Tynan
Lecturer, Department of Business Studies, University of Edinburgh

AND

Jennifer Drayton
lecturer, Department of Marketing, University of Strathctyde, Gtasgew

Market segmentation is a crucial marketing strategy. Its aim is to identify and delineate market segments or "sets of buyers" which would then become targets for the company's marketing plans. The advantage to marketing management is that Ais technique divides total demand into relatively homogeneous segments which are identified by some common characteristics. These characteristics are relevant in explaining and in predicting the response of consumers, in a given segment, to marketing stimuli. The market can be subdivided by geographic, demographic, psychological, psychographic or behavioural variables. The advantages and disadvarUages of each of these types of segmentation variables are discussed in detail in this paper. Kotler {1984) has identified four requirements that a marketer can use in evaluating the desirability of potential market segments, namely measureability, accessibility, substantiality and actionability. Once a segment has been identified which meets these requirements, it is possible to develop a product or service which meets the unfulfilled needs of this segment. A marketing mix can then be devised to reach the segment identified economically and efficiently. A strategy of market segmentation attempts to regain some of the benefits of the closer association with customers which was the strength of traditional business operations. INTRODUCTION This paper presents a review of the literature concerning the concept and practice of market segmentation. This key strategy is essential to the development of a strategic plan for a brand. It is a decision-making tool for the marketing manager in the crucial tasks of selecting a target market for a given product and designing an appropriate marketing mix. The uses of this...