Marketing segmentation is a market approach under which a company sells its goods or services to a targeted set or group or class of customers towards whom it directs its marketing efforts and strategies. As a result according to (Palmer 2012, pg. 57), the core principle in this market approach is the identification of the target market in order to develop the relevant and most suitable marketing plan.
The concept of market segmentation has assumed a critical role in modern marketing especially in the mobile phone industry that has a wide range of products. This is because the product range in this industry is relatively huge. However, through the process of market segmentation, a mobile phone firm is able to divide the existing as well as any potential customers in to different or the desirable subgroups of consumers referred to as the segments according to their shared characteristics. This is done through examination and consideration of the shared characteristics such as common interest, similar lifestyles as well as according to any other relevant demographic profiles. Overall the aim of market segmentation according to (Houston, 2016), is to identify the potential of each segment in order to establish what segment is most likely to be more profitable with a specific product or service or which has the potential for growth in order to better define their target market.
Market segmentation proceeds on the assumption that, different markets segments may need different approaches or programs in order to fully meet their needs and wants. In addition, the approach helps the firm to develop the most relevant offers, prices, distribution, promotions of a combination of such variables for each specific market. However, , market segments are aimed at the identification of the most profitable market segments but rather, they are also meant to develop the most relevant profiles for critical market segments as a means of helping the firm to best understand their needs as well as motivations for their purchase behaviors.
Thomas (2015) explains that the insights gained from market segmentation helps in the planning as well as in the support of the overall marketing development strategy development. For example, it facilitates the use of the S-T-P marketing approach; segmentation- targeting-positions in order to provide the relevant frameworks for all the marketing planning objectives.
With the increasing up take and use of mobile phones, many marketing research studies have shown that more mobile phone customers can convert from one type of hand set to another than online consumers. (Wilkie and Moore 2003) say that the ability of the device that they have at any one time to provides a perfect marketing opportunity as well as a challenge for the players in the industry to decide which phone is held by who at any specific time. As a result, the mobile marketers can apply several principles in segmentation the target consumers.
First, in order for any mobile phone firm to successfully segmented mobile-phone, they have to understand the behavior of the specific or the target consumer. For example, they need to understand how the people use their phones in the perspective of their age, income gender among others. This will help in facilitating the right market drives for each segment. For example, the kind of advertising that appeals to a 30-year-old phone user may not be the same to a teenager user of the same product. According to (Gardner and Levy 2015), the firm must ensure that it easy for the target market to practice what the market strategy preaches. For example is a firm develops a mobile phone that promotes promises different mobile sweepstakes feature with different or numerous traceable coupons such as providing the consumers with login codes via text messages, that prompts them to go online and set their preferences to receive ongoing communications with different marketers, then this has to be true to their word as much as possible and easily. A good example of a company that has benefitted from marketing segmentation is GM. GM has designed certain models of cars based on income and age groups. As a matter of fact, GM sells models for segments with varying combinations of age and income. A case in point is that GM designed its Buick Park Avenue and whose main target were the older and the high-income consumers.
Another critical principle or approach to segmentation the mobile phone market is the use of the Retarget. For example what is more prevalent in one part of the world such the US or Europe such as mobile phone opt in Bluetooth marketing that allows users to access such promotions and other offers may not be available in another part of the world. As a result, the firms may consider introducing such products to specific places but at premium prices. For example (Levitt 2010) explains that they may use such pre market mission such as impossible in American, possible in Massachusetts, then provide the web enabled mobile phones that allow the targeted segment to find deals from their location and prices and using that specific device. A good example of a company that used retarget strategy is eBags. In 2013, eBags was in dire need of a better ad strategy. They had several platform for retargeting, but it opted to use Google AdWords. This was perhaps a surprising alternative in that AdWords receives many flak from the marketing community. EBags developed a remarketing campaign which concentrated on targeting ROAS (return on ad spend), and which eased the process thanks to AdWords’s bid adjustment capability. As a result of this, eBags saw 10%-15% increase in revenue.
Additionally, mobile phones can segment their markets through the acquisition of names as well as through reaching specific customers through partners with which they have created business synergies. For example is a firm has synergies with partners who already have a complimentary customer, they can also build on lookalike models to reach more customers. This way, the firm is able to look at the market data of their partner and thereby build their target product through building an opt-in program based on the market understanding of their partner. For example if from the partners data, the firm learns that the consumer segment has a higher propensity to opt for a specific mobile phone marketing through such prompting as receiving a direct mail offer, then the firm can accordingly pursue such a route by buying such list and then appending their physical address to such data bases. However, is a specific demographic segment is shown to be more apt to respond to other strategies as a DRTV spot, the firm can opt for such segmentations strategy.
The concept of market segmentation provides the firm with different advantages among them
An effective means of allocating marketing resources among the most profitable market segments that are targeted.
Helps the organization to better match the different market segments with the services and products that best match their specific needs
Provides the firms with a good way of understanding the different variety of the customer needs as well as in dividing the market into different segments of the targeted buyers together with their unique needs. For example, given the increasing and widening range of services in the mobile phones, the segmentation marketing strategy to marketing helps the firm to determine where they can be used, why they are the best for use in the specific area, who would use them as well as how much they are going to be used.
Besides, the policy of market segmentation helps the company to gain a greater share of the market segment, better target their market communication strategies, as well as retain more customers. Additionally, (Doyle and Stern 2006) argue that it also helps the firm to better their opportunities for market growth in the industry, helps the firm to enhance their profits as well as to better match their customer needs to the specific products.
On the other hand, and especially in the dynamic and rapidly changing industry such as the mobile phone industry, the Principe of market segmentation helps the firm to precisely reach specifically targeted consumers with specific products specially made to meet their specific needs and wants. As a result, in the long run, the firm is able to use their resources more effectively through the making of better strategic as well as other related marketing decisions.
Moreover, through the principle of marketing segmentation, a firm is able to divide their target market based on their perceived value, benefits as well as according to other perceived consumer advantages that can be provided or derived from the product or a service. For example (McKitterick 2017), holds the view that, in the mobile phone industry, the firm can be able to segment their target market based on the quality of specific products, the performance of the different products, the special features, specified customer services as well as other benefits depending on each market segment.
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