Market Segmentation Success – Making it Happen!

Citation

Barat, S. (2010), "Market Segmentation Success – Making it Happen!", Journal of Consumer Marketing, Vol. 27 No. 1, pp. 86-87. https://doi.org/10.1108/07363761011012985

The concept of “Segmentation” is not novel: every marketing textbook has a chapter dedicated to this much‐discussed topic. However, there are a couple of reasons that makes the current book a “chip off the old block”. First, it is hard to come by a textbook that talks about “segmentation” from a layman's perspective in a concise and comprehensible manner. At the same time, the erudite reader should not be misled by the unassuming size of the book, because the no‐nonsense style of presentation accompanied by crisp examples and case studies makes it pleasant reading both for the scholar and the manager alike. Finally, the fact that each chapter runs about 20 pages goes a long way in making this book attractive and a strong candidate for quick, not‐so‐boring reading!

Market Segmentation Success – Making it Happen! is a reflection of the authors' vast knowledge in this field, and it borrows from their earlier textbook for some conceptual discussions. However, it is not mandatory for the reader to have read the earlier book.

This book is organized into seven chapters. Chapter 1 provides an overview of the concepts of segmentation, targeting, and positioning, which can bring a non‐marketing reader up to speed with the fundamentals. Chapter 2 on understanding and overcoming market segmentation barriers provides us with some of the most common mistakes and pitfalls, while Chapter 3 helps the reader realize the basic importance of understanding one's customer. Trying to segment the market without having a proper “feel” of the current and potential customer is tantamount to putting the proverbial cart before the horse! Since there are several ways a market can be segmented, the authors devote Chapter 4 to contrasting and comparing such methods – which, I feel, are very important from a managerial perspective. If one goes down the “traditional” method of segmentation without getting an opportunity to explore what other alternatives are available, then such an exercise might end up as a fiasco! Sadly, most marketing textbooks on segmentation I have seen miss this point! Chapter 5 provides an in‐depth discussion of how to determine segment targets (referred to as “targeting” in other textbooks). The remaining two chapters are basically conclusive discussions targeted more towards the practitioner than the academic. Chapter 6 describes how to identify, diagnose, and treat market forces that impede the implementation of segmentation, while the final Chapter 7 is an overview of the entire book itself, so that someone in need of a crash course on the implementation challenges of segmentation can read just the concluding chapter.

… To be more specific, I found that Chapter 1, “The segmentation process,” is a very relevant section with three subsections: segmenting, targeting, and positioning. However, the “Benefits of segmentation” subsection should have come after (instead of before) the “Segmentation process” section. Table 1.2 (p. 9), which is similar to what is found in most textbooks, to bring the novice reader of “segmentation” up to speed. The examples on page 17 are interesting and involve companies that most readers are familiar with, something that is not very common in other books.

The listing of potential questions that every manager must be aware of (if not actually ask) before embarking on segmentation is very relevant (p. 31). Once again, this reflects the pragmatic approach that is the hallmark of this book. At the same time, the authors caution the readers by noting “There are no quick and easy answers to all of these segmentation questions” … .“Some questions can really only be answered within the particular context in which segmentation is being carried out, but key knowledge can be shared across the experiences of many markets.” (pp. 31‐32). Speaking of “context” and “many markets”, the authors have performed a commendable job of citing case studies from different fields in illustrating some of their important points, which makes not only interesting reading but also potentially relates to readers from diverse backgrounds. Further, the categorization of segmentation barriers into infrastructure, process, and implementation (p. 32) is helpful from strategic and management perspectives. This multi‐step approach to segmentation is novel indeed! It reflects the authors' vast experience and knowledge in this field. But more importantly, it is helpful for managers who are struggling with implementation issues.

Chapter 3 discusses some fundamental principles of consumer behavior such as purchase motives (a.k.a. rational, problem‐solving, emotional etc.). As I mentioned before, it is imperative for the manager to have a sound understanding of the customer's purchase decision‐making process to implement segmentation successfully, and this is further corroborated by the Airbus‐Boeing example on page 67.

In Chapter 4, the authors continue their no‐nonsense presentation pedagogy: “Marketing textbooks tend to present a rather simplistic approach to carrying out market segmentation … This is a reasonable process to follow, yet in practice it can be difficult to operationalize” (pp. 73‐74). At the same time, the authors agree that not everything is available “off‐the‐shelf”; in other words, “managerial judgment” (aka gut‐feeling) also plays a role in segmentation. The authors introduce (the role of) statistics and how to use some tools in this chapter (p. 75), which is helpful for the analytical reader. After all, segmentation can never be complete without appropriate statistical analysis! Readers can probably compare the findings (Lazy Lisas, Hedonistic Helens, Proper Paulas, Reticent Ritas and Busy Belindas) of the case study on page 93 with the PRIZM tool (www.claritas.com), although the segmentation criteria in the latter tool are much more exhaustive.

Chapter 5 is devoted to the implementation aspect of market segmentation. Specifically, I found the comparison between the BCG matrix (which is more popular) and the Directional Policy Matrix (DPM) interesting from a decision‐making perspective, even though the analysis must be considered with a grain of salt: “It does not indicate how such a strategy should be implemented. The purpose of the model is to serve as a diagnostic tool to highlight the most attractive market segments to address and those on which to avoid wasting resources.” (p. 110). The Segment Evaluation Matrix (SEM, p. 118), on the other hand, might seem a bit daunting to the greenhorn, but it can prove to be a highly effective tool for an organization that has adequate money and resources to undertake such an exhaustive exercise.

Chapter 6, on how to identify, diagnose, and treat market forces that inhibit customer segmentation, advices the manager on how to look for potential hindrances to the process of segmentation and at the same time, it crafts strategies on countering such debilitating forces. In other words, much to their credit, the authors urge the reader to approach the phenomenon named “segmentation” with medical precision.

Chapter 7, as noted earlier, provides a summary of the contents of the book, even though I would argue that “thirty rules” seem a bit scary, especially for someone who just wants to browse this chapter instead of going through the entire text. Aptly enough, the authors underline their commitment to the contents when they say “These must‐do rules are designed to help managers to pre‐empt or overcome the most commonly encountered segmentation problems, so that their impact is minimized. This advice fits with the overriding aim of this book, which has been to guide marketers on a successful journey through (the text says ‘though’ instead of ‘through’, which, by the way, is the only typo I found) every stage of the market segmentation process.” (p. 154).

Overall, I feel that this book is a must‐have for everyone interested in the details of segmentation, more so for managers than for academics or researchers. It is well‐organized, convenient in size, easy to read, provides good and relevant case studies to illustrate the points, and goes an extra mile to pinpoint the potential pitfalls of unplanned attempts to segment a market. Special mention must be made that each chapter concludes with a Summary, Chapter review, Practical implications, and Links to other chapters – of which the last two sections I found particularly interesting, because they keep the reader “involved” and keep looking for “what's next”! Therefore, I would recommend it highly to anyone interested in revamping their knowledge on segmentation.