Market Segmentation

Topics: Marketing, Product differentiation, Economics Pages: 10 (3076 words) Published: May 11, 2013
Product Differentiation and Market Segmentation as Alternative Marketing Strategies Author(s): Wendell R. Smith Source: Journal of Marketing, Vol. 21, No. 1 (Jul., 1956), pp. 3-8 Published by: American Marketing Association Stable URL: . Accessed: 24/04/2013 13:20 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .

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PRODUCT DIFFERENTIATION AND MARKET SEGMENTATION AS ALTERNATIVE MARKETING STRATEGIES WENDELL R. SMITH A lderson & Sessions the decade of the 1930's, the duces a diversity in supply that is inconwork of Robinson and Chamberlin sistent with the assumptions of earlier resulted in a revitalization of economic theory. The reasons for the presence of ditheory. While classical and neoclassical versity in specific markets are many and theory provided a useful framework for include the following: economic analysis, the theories of perfect 1. Variationsin the production equipment competition and pure monopoly had beand methods or processesused by differcome inadequate as explanations of the ent manufacturers products designed of contemporary business scene. The theory for the same or similar uses. of perfect competition assumes homoge- 2. Specialized or superior resources enneity among the components of both the joyed by favorably situated manufacdemand and supply sides of the market, facturers. but diversity or heterogeneity had come 3. Unequal progressamong competitorsin to be the rule rather than the exception. design, development, and improvement of products. This analysis reviews major marketing in alternatives that are available to 4. The inability of manufacturers some strategy industries to eliminate product variaand merchandisers of products planners tions even through the application of in an environment characterized by imquality control techniques. perfect competition. 5. Variationsin producers'estimatesof the nature of marketdemand with reference Diversity in Supply to such mattersas price sensitivity,color, material,or packagesize. That there is a lack of homogeneity or close similarity among the items ofBecause of these and other factors, fered to the market by individual manuboth planned and uncontrollable differfacturers of various products is obvious in any variety store, department store, or ences exist in the products of an industry. As a result, sellers make different apshopping center. In many cases the impeals in support of their marketing efpact of this diversity is amplified by ad- forts. vertising and promotional activities. Today's advertising and promotion tends to or Variations in Consumer Deemphasize appeals to selective rather Diversity mand than primary buying motives and to Under present-day conditions of impoint out the distinctive or differentiating features of the advertiser's product perfect competition, marketing managers or service offer. are generally responsible for selecting the The presence of differences in the sales over-all marketing strategy or combinaoffers made by competing suppliers pro- tion of strategies best suited to a firm's URING


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