In consumer markets, for a market segment to be an effective and viable target, the segment should be: A. Identifiable B. Reachable C. Transcending International boundaries D. Sizeable Choose the correct answer from the options given below:
A, B and D only
Understanding Effective Market Segments in Consumer Markets
Market segmentation is a fundamental strategy in marketing. It involves dividing a large, heterogeneous market into smaller, more homogeneous segments based on shared characteristics, needs, or behaviours. The goal is to target these segments more effectively with tailored marketing mixes.
However, not all identified segments are suitable for targeting. For a market segment to be considered effective, actionable, and a viable target market, it generally needs to possess certain key characteristics. Let's examine the characteristics provided in the question:
- A. Identifiable: Can marketers identify and measure the segment? This means being able to define the segment based on specific criteria (e.g., demographics, psychographics, behaviours) and estimate its size and purchasing power. If you cannot identify who is in the segment or measure its potential, you cannot effectively target it. This is a crucial characteristic.
- B. Reachable: Can marketers effectively access the segment through communication and distribution channels? Being able to reach the segment means you know where they get their information (media habits) and how they prefer to buy products or services. If a segment is identified but cannot be reached with marketing efforts or through available distribution channels, it is not a viable target. This is also a crucial characteristic.
- C. Transcending International boundaries: Does the segment need to exist across multiple countries? While global segments exist, many effective and viable market segments are local, regional, or national. A segment does not need to transcend international boundaries to be effective or profitable for a business. For example, a local bakery might effectively target residents within a specific neighbourhood. This characteristic is not essential for a segment to be effective and viable in general.
- D. Sizeable: Is the segment large or profitable enough to make targeting worthwhile? The segment needs to be substantial in terms of population or purchasing power to justify the investment in developing a specific marketing mix for it. A segment might be identifiable and reachable but too small or unprofitable to serve effectively. The concept of "sizeable" often includes the idea of substantiality, meaning the segment must be large or profitable enough. This is an important characteristic for viability.
Key Characteristics of Effective Market Segments
Based on common marketing principles, the essential characteristics for an effective and viable target market segment are usually considered to be:
- Measurable/Identifiable
- Accessible/Reachable
- Substantial/Sizeable
- Actionable/Differentiable (though "Differentiable" is not listed as an option here)
From the given options, the characteristics deemed necessary for an effective and viable target are Identifiable (A), Reachable (B), and Sizeable (D).
| Characteristic | Description | Essential for Effective Targeting? |
|---|---|---|
| Identifiable (A) | Ability to define and measure the segment. | Yes |
| Reachable (B) | Ability to access the segment via marketing channels. | Yes |
| Transcending International boundaries (C) | Existing across multiple countries. | No |
| Sizeable (D) | Being large or profitable enough. | Yes |
Therefore, a market segment should be Identifiable, Reachable, and Sizeable to be an effective and viable target.
Conclusion on Effective Market Segmentation
Selecting the right target market segments is critical for marketing success. Effective segmentation ensures that marketing efforts are focused on groups that are not only willing and able to buy but also accessible and large enough to generate sufficient revenue. The characteristics Identifiable, Reachable, and Sizeable directly address these needs.
Revision Table - Effective Market Segmentation
| Characteristic | Why it is important |
|---|---|
| Identifiable | Need to define and measure the target group. |
| Reachable | Need to access the target group with marketing messages and products. |
| Sizeable | Need the target group to be large or profitable enough for efforts to be worthwhile. |
Additional Information - Market Targeting Strategies
Once effective market segments are identified, a company can choose different targeting strategies:
- Undifferentiated (Mass) Marketing: Targeting the entire market with one offer. Ignores market segment differences.
- Differentiated (Segmented) Marketing: Targeting several market segments and designing separate offers for each.
- Concentrated (Niche) Marketing: Targeting a large share of one or a few segments or niches.
- Micromarketing (Local or Individual Marketing): Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments.
Each strategy requires understanding the characteristics of the identified market segments.
Important Questions from Market Segmentation - Teaching
A company divides consumers into groups by age, income and family size. Which basis of market segmentation is it using?
Grounds for market segmentation based behaviour are:
(a) Benefit sought
(b) Life style
(c) Purchase occasion
(d) Usage rate
Which of the following option is correct?
Arrange the following steps in the segmentation process in sequential order:
(A) Determine which demographics, life styles and usage behaviour make the segment distinct and actionable
(B) Create a "value proposition" and product-price positioning strategy for each segment
(C) Group customers into segments based on similar needs and benefits sought by them
(D) Determine overall attractiveness of each segment based on some predetermined criteria
(E) Create 'segment story board' to list the attractiveness of each segment's positioning strategy
Choose the correct answer from the options given below:
