Lyndon Simkin

Market Segmentation: Diagnosing and Treating the Barriers

Abstract Although the benefits that segmentation offers are well documented, businesses continue to encounter barriers to implementation. This raises an important dilemma. If corporations are to unlock the benefits of segmentation, there are important questions to answer about the nature of these barriers and how they can be overcome. These questions are addressed in this article by reviewing a combination of published evidence and case study material. The literature review indicates key areas for businesses to consider when implementing a segmentation approach. These areas relate to the “infrastructure” in place at the start of the segmentation process, the “segmentation process” itself, and a series of “implementation” questions. Case studies of corporations that have attempted to develop a new or revised segmentation strategy are used to illustrate each of these areas. The themes from these cases then are used as the basis for a simple tool designed to diagnose and then treat the infrastructure, segmentation process, and implementation barriers.

The Strength of Branding and Positioning in Services

In a recent article advertising agency boss Stephen King suggested that now is the time to revitalize the marketing of brands for the 1990s, and in particular to develop branding and positioning in services marketing. Argues that King′s comments do not do justice to the majority of marketing departments, especially the growing ranks of services marketers, and that current practice in this area is already well established in its own right. Draws on evidence from services marketing theory and practice to consider whether this area of marketing is any less developed than the marketing of manufactured goods. The initial focus is on the particular characteristics of the services sector and the resulting extension of the traditional marketing mix. For the practitioner, branding and positioning are at the forefront of the consumer offering. The role of branding and positioning in services marketing is, therefore, a key element of the discussion. Is the marketing of services a lower form of the discipline than th...

A program for implementing market segmentation

Organizations wishing to apply the principles of market segmentation often face problems putting the theory into practice. All too often the required background analysis is inadequate or poorly structured or the translation of segmentation strategy into marketing programs is impeded. To be successful, segmentation must lead an organization through a process which undertakes background analysis, determines strategy and develops marketing programs. However, there are a number of points at which the process can break down. Shows how the segmentation program described has tackled these difficulties, leading several management teams through the analysis, strategy and program elements of the market segmentation process. A range of benefits arise from the program. Primary benefits are that the process puts the customer first, maximizes resources and emphasizes strengths over competitors. Secondary benefits relate to the development of a more market‐focussed company culture and the building of inter‐ and intra‐organizational relationships.

Implementation problems in industrial market-segmentation

Marketing theory suggests that market segmentation offers a range of benefits to industrial and consumer marketers alike. Experience in industrial markets, however, while supporting these suppositions, highlights the considerable practical problems that can be faced by companies attempting to put market segmentation into practice. This paper reviews the industrial segmentation literature and considers a mix of qualitative and quantitative evidence from the European construction and agricultural markets and the UK aftermarket for car parts, making recommendations about the application of theoretical segmentation principles in practice.

TARGETING, SEGMENTS AND POSITIONING

Customers have unique requirements, aspirations and satisfaction levels. Some customers, though, are “similar”: they have common requirements for goods, services and ideas. If these customers′ needs can be clearly identified and those with similar needs grouped in quantities of sufficient sizes, market segments have been determined. Each customer group – or market segment – has specific expectations and retail marketers must develop retail brands and concepts which cater for the needs of the segment targeted. Having decided on which segment (or segments) to target, retailers position their brands with an image with which the targeted customers identify. Market segmentation, targeting and positioning is a fundamental process in modern retail marketing strategy. The key decisions and the steps necessary for successful implementation are examined.

The dark side of CRM: advantaged and disadvantaged customers

Purpose – CRM treats various profiles of customers or individual customers differently, purposively favoring certain customers while deliberately disadvantaging others. This research aims to provide insights into how advantaged (favored) and (non-favored) disadvantaged customers perceive fairness in retailers’ marketing tactics. Design/methodology/approach – A multiple study approach has been adopted, influenced by a three-stage process, which involved exploratory interviews, pilot tests, and the main survey. Findings – The results have provided marketers with a perspective on maintaining and enhancing relationships. Service and marketing communications concern the advantaged customers most, while pricing is the most important aspect for the disadvantaged customers. Practical implications – In terms of handling customers, there are important implications from recognizing how those who are favored and those who are not so advantaged perceive their treatment. Failure to appreciate the pitfalls for visibly t...

Prioritising target markets

Target marketing is a key decision area for all businesses. Market size, growth rates, competitive forces, customer fit and profitability are just a few of the criteria which can be used by businesses assessing the attractiveness of their target markets. Yet despite the wealth of variables available to managers and the development of a range of decision tools to help them, research indicates that many businesses continue to assess target markets on the basis of short‐term profitability measures. This paper examines the wide range of approaches which have been proposed in the literature for identifying market attractiveness and questions how these fit with managerial practice, utilising the findings from cases and two studies of The Times 1000 UK companies’ target market approaches. The studies’ findings indicate that the literature’s formal, multi‐criteria tools for assessing market attractiveness are not necessarily reflected in the simplistic view adopted by many marketing professionals and brand managers. The paper concludes by offering a research agenda to help define future work in this area.

Bridging the segmentation theory/practice divide

More than thirty years ago, Winds seminal review of research in market segmentation culminated with a research agenda for the subject area. In the intervening period, research has focused on the development of segmentation bases and models, segmentation research techniques and the identification of statistically sound solutions. Practical questions about implementation and the integration of segmentation into marketing strategy have received less attention, even though practitioners are known to struggle with the actual practice of segmentation. This special issue is motivated by this tension between theory and practice, which has shaped and continues to influence the research priorities for the field. Although many years may have elapsed since Winds original research agenda, pressing questions about effectiveness and productivity apparently remain; namely: (i) concerns about the link between segmentation and performance, and its measurement; and (ii) the notion that productivity improvements arising from segmentation are only achievable if the segmentation process is effectively implemented. There were central themes to the call for papers for this special issue, which aims to develop our understanding of segmentation value, productivity and strategies, and managerial issues and implementation.

Judging the quality of customer segments: segmentation effectiveness

Market segmentation is well established in marketing theory and applied by organisations from all industry sectors. Despite widespread use, developing and implementing segmentation schemes is rarely problem free. Testing the quality and robustness of segments is one of the difficulties which marketers face. The literature describes segment quality criteria which are intended to help with this task, yet there is little evidence of their deployment and efficacy in practice. Using a longitudinal case study from the Eastern European mobile phone market, the practical application, impact and efficacy of these segment quality criteria are examined. The findings reveal the value of combining ‘hard’ statistical and ‘soft’ segment quality criteria to test the validity and robustness of segmentation outputs prior to implementing the segmentation. Implications from this case for managers seeking to select and deploy suitable quality criteria are considered.

The dynamics of public relations

Public relations is variously defined: those within the PR sector tend to view their activities as having strategic and corporate impact, while many marketers classify PR as little more than a tactical ingredient of the promotional mix. This contrast is important, given marketers are heavy users of PR activity. This confusion has hindered the development of the PR profession and added to the blurring of exactly what constitutes PR. Contributes to this discussion by identifying the core constituents of public relations and the underlying driving forces. Through a holistic approach, examines “PR‐ness” at three different levels. Survey data were gathered from public relations consultancies in the UK. Exploratory factor analysis and confirmatory factor analysis were used to examine the responses of 297 public relations consultancies in England. As a result, the many driving forces within the PR domain have been identified and grouped into nine measurement scales of “PR‐ness”. These findings provide PR practitioners with a set of issues to address in order to progress the perceived professionalism of their activities and they offer a framework for assessing subsequent progress in this respect.