QUESTION:
(a) Identify and explain the challenge of market segmentation
(b) Develop measure for overcoming the challenges
Market segmentations may be as the identification of individuals or organizations with similar characteristics that have significant implications for the determination of market strategy.
The main objective of market segmentation is to identify groups of customer with similar requirements so that they can be saved effectively while being of sufficient size for the product or service to be supplied efficiently
Particularly in consumer markets it is not possible to create a market mix that satisfies every individual's particular requirementsexactly. By grouping together customers with similar needs, provides commercial viable methods of serving these customers.
Through the main objectives ofmarket segmentation is to identify groups of customers with similar requirements. There are some challenges which face the market segmentation in implementation such as follows:-
There is no data in demographic change; demographic consist of population structure such as age and sex,population distribution as well as population size. Therefore firms fairy to obtain the accurate and reliable data for this change in their segmented market. For example if the firm need to provide health services and the targeted market is women therefore the firm will fail to obtain the accurate data of change the number of women in a specific or certain period of time.
The change in perception (tastes and preference );is when the firm focus on producing the certain product for it's targetedmarket during a certain period of time the customer taste and preference may tend to change and the firm lost prospective customer due to competition.
Money supply within targeted market ;because when the firm segment it's market it should set also the market mix to deals with that market such as product,price,promotion and place therefore the firm may fail to understand the money supplies of that targeted market and hence fail to set the right price for the product.
Difficult in measuring and predict consumerbehavior, it's so difficulties for the firm to segment themarket and to identifies direct the consumer purchasing behavior which influence by culture, subculture social classes which sometimes may change the buying behavior of the targeted market.
Ignoring the potential customers;the market segmentation process approximately offer to the needs of customers, in group rather than individual, therefore there is a chance that customer needs are not full meet.
There is insufficientconsideration of how market segmentation is linked to the competitive advantages; the product differentiation concept is linked to the need to develop competitiveoffering but market segmentation does not stress the need to segment on the basis of differentiating the offering from competitors.
Marketing management costs; is thelager amount of management cost that a market segmentation strategiesrequire for each of its market the firm must design a coordinate marketing strategy. That is to determine how much it charge for the product, how the product should be promoted,and where it should be sold. The more segment the firm tries to reach the more its managerial resources must be devoted to developing and monitoring segmentation strategies.Due to the above challenges that face a firm in segment the market, there are some step measure have been taken to overcome the challenges such as follows:-
Effective use of market resources; the firm should ensure that the physical and human resources are effectively utilize to ensure that the targeted market obtain what they want or desire by involving the company workers from early stages of market segmentation.
Accurate measurement of good and performance; the firm must make sure that the sated goals are being adhere followed by implementing the effective strategy to archive these goals and measure the performance to make sure that goals are archived according to plan, without diverting.
Understanding the customer need, understanding what drive customer, how they want to be made to feel and what motivated they involve to enable the firm to identify and effectively targeted group of individual shared value. This put the firm in position to influence there behavior and deliver deeply satisfying experience.
Segment tend to be practical, segment need to be sufficient in size to make targeting them worthwhile firms effort and they need to be in position to engage with the firms offer. Having too many segments will also make managing your strategies tedious.
Segment must be discerned ably different, when you segment your audience or potential audience the first thing is to make sure the segment has discerned ably different needs. If one segment has no distinguishing differences from another or they all respond in similar way you will endup with homogenous strategies, which defend the point of segmentation.
Therefore market segmentation offer offer several benefits to the marketing managers. Since the market segmentation strategies are based through study of the market, it become a tools for appraising competitive strength, and vulnerability, for planning the firm product line.For determining its advertisement and sales strategies, and for setting specific marketing objectives against which performance can be measured. Market segmentation is clearly beneficial to most firms.
REFFERENCES:
Cunningham W. (1981)Marketing; Ohio,South western Publishing Company
Kotter P. (1997):Marketing Management Analysis Planning and Control;Prenticise Hall inc
Marking R.(1982):
Marketing Strategy and Management John ,New york,John Willy and Sons Printers