Looking further into market segmentation, identify and describe four or more ways markets can be segmented. How do firms decide which market segments to target? Why is segmentation so important?
Let’s look at a military base. A military base has a very interesting and challenging segmentation. The dynamics are always changing. I worked for a company that helped retailers identify its customers and segmentation groupings. Based on this information and a characteristic known as “drive time,” our research models could assist retailers with identifying a location for the next store and then predict sales for the next 1-3 years. There were always some locations that were anomalies…..military bases and tourist destinations. There were quite a few unpredictable variables in these locations that made it difficult to forecast sales and complete sales trend analysis because they are unique locations that can’t be replicated.
Here is an informative site on segmentation;
http://www.businessplans.org/Segment.html
What would happen if a company did create and implement a segmentation strategy? Can you think of any companies that do not use some type of segmentation strategy, but instead, focus on mass marketing and communications? Are these companies successful?
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