Requirements for effective market segmentation are:

(A) Accessibility

(B) Differentiation

(C) Measurable

(D) Viable

(E) Intensity in competition

Choose the most appropriate answer from the options given below:

The correct answer is (A), (C), (D), (E) only

Key Points

Market segmentation:

• ​Market segmentation seeks to identify targeted groups of consumers to tailor products and branding in a way that is attractive to the group.
• Markets can be segmented in several ways, such as geographically, demographically, or behaviourally.
• Market segmentation helps companies minimize risk by figuring out which products are the most likely to earn a share of a target market and the best ways to market and deliver those products to the market

Important Points Requirement for effective market segmentation:

Measurable:

• The size and purchasing power profiles of your market should be measurable, meaning there is quantifiable data available about it. A consumer’s profiles and data provide marketing strategists with the necessary information on how to carry out their campaigns.

Accessible:

• Accessibility means that customers and consumers are easily reached at an affordable cost. This helps determine how certain ads can reach different target markets and how to make ads more profitable. 

Actionable:

• The market segments need to be actionable, meaning that they have practical value. A market segment should be able to respond to a certain marketing strategy or program and have outcomes that are easily quantifiable.  

• As a business owner, it’s important to identify what kind of marketing strategies work for a certain segment. Once those strategies have been identified, ask yourself if the business is capable of carrying out that strategy. 

Intensity of competition:

• The segmentation strategy should provide opportunities for likely products or services to compete effectively.
• If the intensity of competition is destructive (destroying value for all players) then you want to avoid this strategy.