Question

Which is the following is not criterion for successful market segmentation

Answer 1

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Successful market segmentation depends on four basic criteria:

• A market segment must be substantial and have enough potential customers to be viable,
• A market segment must be identifiable and measurable,
• Members of a market segment must be accessible to marketing efforts, and
• A market segment must respond to particular marketing efforts in a way that distinguishes it from other segments.

Answer 2

There are following criteria for an effective segmentation:

i. Measurable and Obtainable:

The size, profile and other relevant characteristics of the segment must be measurable and obtainable in terms of data.

It has to be possible to determine the values of the variables used for segmentation with justifiable efforts. This is important especially for demographic and geographic variables. For an organisation with direct sales (without intermediaries), the own customer database could deliver valuable information on buying behaviour (frequency, volume, product groups, mode of payment etc).

ii. Relevant:

The size and profit potential of a market segment have to be large enough to economically justify separate marketing activities for this segment. If a segment is small in size then the cost of marketing activities cannot be justified.

iii. Accessible:

The segment has to be accessible and servable for the organisation. That means, the customer segments may be decided considering that they can be accessed through various target-group specific advertising media such as magazines or websites the target audience likes to use.

iv. Substantial:

The segments should be substantial to generate required returns. Activities with small segments will give a biased result or negative results.

v. Valid:

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