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The face of marketing is changing and the two major factors which are predominantly responsible for this change are the segmentation of the mass markets and the huge advancements in information technology (Kotler, 2000, p. 404). Lury (2004, p. 9) tells us that his friend, Phil Spires, a DJ, divides the whole world into three basic types …he calls this the three D’s Those who Dance
Those who Don’t dance
And those who DJ
And this sums up in a simple but memorable way what segmentation is all about. He goes on to remind us that you cannot be all things to all people all of the time. Companies and brands need to focus. They need to segment the population in some way in order to identify the group of people with whom they will do most business. Having done that it is easier to get to understand them and their precise needs better. This in turn allows the company to be more cost effective and to recognise opportunities for product improvements, new products and service development. Segmentation is an important approach in developing any market strategy and a significant use for market research. Lury (2004) outlines numerous ways of dividing the population into segments, from a simple divide of men and women to more qualitative segmentation based on attitudes and lifestyles. He outlines some models used - 1. Demographic segmentation…age, gender, ethnicity.
2. Geo-demographic- as above but in a certain geographical area. 3. Class and socio- economic segmentation. This uses class or occupation as the distinguishing variable. 4. Attitudinal or psychographic. This is more subjective. It uses quantitative clusters to identify segments of the population who are identified by the same attitudes, beliefs and behaviour. An example of this being Yuppies (young upwardly mobile professionals) 5. Girls, lads, Sloane rangers, Princess Diana types or Essex girls. 6. Brandographics (Lury,2004, pp.68-72). Many people now define themselves through brands Market segmentation research began to gather pace from the 1960’s on. The most common interpretation is Kotler’s (1997) logical planning stages - market segmentation, market targeting and market positioning. This means the ‘search for homogeneous groups of consumers which should be measurable, substantial, accessible, stable and actionable’. (Kotler, 1997, as cited in Quinn et al, 2004, p. 441) This literature review reveals that many studies on the topic of segmentation do not agree with Kotler’s views and while in theory it makes sense, the studies demonstrate that this does not always work out in practice as many variables and barriers exist. Quinn, Hines and Bennison (2004) set out to evaluate the practice of marketing segmentation and to assess the theoretical and practical implications of their findings. They come to the conclusion that the current definition of market segmentation is too narrow which rarely takes into account tacit and intuitive knowledge. They highlight the importance of this aspect of marketing, which is knowledge that is free from technical formulas, such as - reading the situation, hunches, gut feelings, making decisions, all of which usually come from experience. The knowledge of when to buy, when to sell or which new undertaking is likely to succeed is a vital component of running a successful business. The study states that tacit knowledge is difficult to formulate and is, therefore, difficult to share and manage. But if it is converted to explicit knowledge it can offer greater value to a company. Callahan (2005) agrees with the views of Quinn et al (2004). He states that knowledge is the key to marketing and that a company needs both explicit and tacit knowledge to survive. Tacit knowledge makes up a substantial proportion of this knowledge, in some cases up to...
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