The Future of Segmentation and Positioning

The various bases for segmenting markets underscored the need to understand consumers. Each segmentation approach has merit and although not all have exhibited the ability to predict consumers’ purchasing habits, they do enable marketers to understand better their target markets. When combinations of approaches are used in aiming at the total marketing problem segmentation research and be very meaningful. With enhanced understanding comes the ability to develop more tailored marketing programs. The need to segment markets and position products effectively is increasingly being recognized by marketing managers. For instance, a recent survey of top marketing executives showed that developing market segmentation strategies was one of the key pressure points they had to deal with in a recent year.

The great deal of attention and interest generated by the concept of market segmentation is sure to become even more significant in the future. Three environmental factors are expected to lead to this growth. First, the advance of the consumerism movement will foster market segmentation, since critics have pointed to segments they believe are neglected in our present system. The result of these critic pressures is that managers become more attentive to previously unrecognized consumer needs.

A second factor encouraging market segmentation is intensified competition. With increasingly competitive markets (domestic and worldwide) in the future, business people will seek untapped segments to gain an advantage over rivals.

The third factor stimulating market segmentation is the growing awareness of non business applications of the technique. It will increasingly be utilized for marketing in non traditional areas such as politics religion and public issues.

Many consumer characteristics were presented. All of these consumer attributes were discussed within the framework of market segmentation – that is an approach to selecting groups of homogeneous consumers as targets for marketing activity. Whereas market segmentation seeks to carve a large, heterogeneous market into smaller, more uniform subdivisions at the other end of the strategy spectrum – market aggregation – no subdivision of the market is applied. Most firms today follow a market segmentation approach. Furthermore, it was shown that in order for market segmentation to be effective, the target group must be identifiable and measurable; accessible; substantial and responsive.

With these criteria in mind, four alternative bases for segmentation are considered here: demographic, lifestyle, usage, and benefit. In addition, a number of marketing implications are suggested based upon these variables influence on consumers’ behavior.

Although the use of demographic variables is intuitively and widely available to marketers their record as predictors of consumer behavior is not very strong. However, the problems in their use seem to be the result of a state of the art limitation in analysis rather than a fundamental defect in the technique. Consequently, they should continue to play an important role in segmentation efforts by marketers.

Marketers must have demographic geographic and socioeconomic information about any segments chosen if they are to market effectively to them.

Techniques may provide a richer portrait of potential customers through lifestyle usage or benefit segmentation. All of the techniques suggested as well as others overlap and are complementary. Therefore choices have to be made regarding the best combination of methods to employ for each product or service.

The close interrelationship between market segmentation and product positioning was also discussed. Several approaches to product and company positioning were described along with analytical methods for making such decisions.

Finally, from this discussion of market segmentation a clearer understanding should be gained about the who of consumer behavior that consumers are people of widely varying characteristics appreciation of this fact and an understanding of the ways in which clusters of consumers with more homogeneous characteristics may be carved out of the heterogeneous marketplace should establish a firm foundation for further exploration into the factors that influence consumer behavior.