TABLE OF CONTENTS The segmentation process involves establishing criteria by which groups of consumers with similar needs can be identified. These criteria have to identify consumer groups that have the following characteristics:
The consumers in the segment respond in the same way to a particular marketing mix.
The consumers within the segment have to react in a clearly different way from other groups of consumers to the marketing mix on offer.
The group has to be large enough to provide the return on investment necessary to the organization.
The criteria used to identify the segment have to be operational. The following experience illustrates this point. A small company in the magazine market identified a group of customers that had clear needs: overseas nationals living in the UK who wished to buy magazines from their home country. The organization's proposed marketing offer was to import magazines from overseas and mail them out directly to the consumers' homes. This was a potential customer group that all responded in the same way to the proposed marketing mix. They clearly acted differently from other groups in the magazine market. This potential segment was large and potentially profitable but this was a difficult group to make operational. Overseas nationals cannot easily be identified as there is no official organization or overseas institute that will supply the names and addresses. The only way of pursuing this opportunity was to persuade overseas nationals to identify themselves. This could have been accomplished by attracting consumers to respond...
