Contents
This essay discusses the below given questions – - Can market segmentation be taken too far? What are the potential disadvantages of over-segmenting a market? What strategies might an organization implement if it believes that the market has been broken into too many small segments?
Description
Marketing segmentation allows companies and brands to focus on predefined consumer target groups for their marketing efforts (Hooley et al, 2002). Marketing segmentation also allows brands to customize their products to suit the needs of different customer segments (Brady & Davis, 1993). A simple example of market segmentation could be that of a bank that segments customers as personal and business. The personal banking segment can further be segmented as savings accounts, loan accounts and credit card customers. Similarly, business segment can also be classified as small business, medium businesses and corporate houses depending upon their turnover. While segmentation has its advantages of being able to target and cater to customers that have similar buying needs, too much of segmentation could result in loss of focus on the overall market. Further, too much of segmentation can result in increased expenses, which may not justify the earning derived from each of the segments. This paper analyses market segmentation and discusses the disadvantages of over segmentation.
