Tag Archives: characteristics

What’s wrong with Market Segmentation?

This article on Bnet.com highlights how most companies do not derive real value from implementing a major marketing-segmentation initiative. Why is that? A study conducted by the Harvard Business Review reveals that segmentation generally focuses in on different ‘types’ of consumers. This practice makes it easier for advertisers to develop and tailor messages directed to specific segmentation groups, but it does not tell companies whether or not these consumers will actually buy the product or service. Yankelovich and Meer from the Harvard Business School suggest tailoring your segmentation to a strategic decision. Define segments by consumer current consumer behavior and also their likely behavior. Over time, redefine segmentations as the market changes. They suggest these tactics in order to segment markets effectively: ?? Identify a strategic decision that would benefit from information about different customer segments. ?? Determine which customers drive profits. ?? Analyze actual and potential purchasing behavior. ?? Segment in ways that make sense to senior management. ?? Revise your segmentation as market conditions change. Read the full article here.