Market segmentation has long been a well researched marketing construct; and is applicable in most fields of business. As such, marketers articulate the essence of differentiation as a method of meeting consumer needs over and above the ability of their competitors. Many marketing investigators apply this specific research strategy in a manner to convert marketing concepts into business propositions. Firms use market segmentation to effectively allocate resources to develop and cascade products and services into the hands of consumers. The justification behind market segmentation is based on the premise that individual products and services can seldom suit the requirements and desires of all consumers. Since consumer preference for specific products and services are ever-changing, savvy marketers meticulously and rapidly identify consumer preferences and appropriately make product and service adjustments to appease customer’s needs and wants.
Two basic market segmentation practices include a priori and clustering. The foundation of a priori segmentation involves marketer’s assumptions and decisions to appeal to a specific segment of the consumer base prior to performing market research relative to determining a viable market segment. Marketers also make decisions to divide the market into segments or groups based on the consumer’s aspiration for a company’s products or services. A thorough investigation is performed to differentiate the market segments into size, demographic, and psychographic categories. Whereas, clustering segmentation seeks to analyze customers’ products and services, and market settings to determine similar variables within these groups. Market researchers also use clustering to segment out similarities as well as differences within and among consumer groups.
Standardization versus adaptation of product and service offerings is two opposing marketing strategies. Market standardization addresses selling essentially the same product in all markets. Market standardization links to economies of scale and established benefits associated with designing, manufacturing, and the ability to distribute products in multiple countries. Offering the same product in all markets may be undesirable due to differences and uniqueness relative to legalities; distribution channels; regional climates; topography; technological development; and competitive and cultural factors. On the other hand, product adaption focuses on the extent to which a product’s tangible distinctiveness and presentment has the ability to penetrate multi-national markets. Effective strategies relative to product adaptation tend to foster higher ROIs and revenues. So there, now you have it – marketing mayhem!
