1. Segmentation Strategies
Using our limited resources wisely
Mass market approach
Large segment approach
Adjacent segment approach
Multisegment approach
Small segment approach
Niche approach
Mass customization approach

2. Segmentation Strategies
Mass Market Approach: a generic
value proposition built around the core
customer need and the business’s
generic positioning strategy
Use when:
differences in customer needs
are small

3. Segmentation Strategies
“Large Segment” Approach: address
one set of core customer needs
Use when:
resources are limited
advantage: benefits of segmentation
while providing a relatively large
market demand

4. Segmentation Strategies
“Adjacent Segment” Approach: move
into the next most attractive segment
Use when:
growth is desired but
resources are limited
advantage: use profits from primary
segment to move into closely
related segment

5. Segmentation Strategies
“Multisegment” Approach: multiple market-
based strategy where several segments are
targeted, each with its own marketing mix
Use when:
growth is desired but
resources are limited
advantage: tailor our efforts toward most
attractive segments
improve efficiencies
portfolio effect

6. Segmentation Strategies
“Small Segment” Approach: focus on the smallest
segment
Use when:
resources are limited, specialized capabilities
small segments are ignored by competitors
pursuing mass market or large segment strategies

7. Segmentation Strategies
“Niche” Approach: focus on a portion of the smallest segment
Use when:
some needs cannot be fully addressed within a single segment

8. Segmentation Strategies
“Mass Customization” Approach: complete opposite of mass market strategy; each unique group of customer needs is a niche
Use when:
database marketing allows customization within each segment
combines the advantages of niche segment strategy with the breadth of opportunity available in a multisegment strategy
customers create their own segments
Disadvantages:
increased price of customized products
delay in receipt of custom-made products
need for customers to invest time in specifying their preferences before the product can be produced

9. So…
Each segmentation strategy has its own merits and limitations
Segmentation is the first step in Customer Relationship Management
Demographics alone seldom provide much guidance for product development or message strategies – we need to group people on the basis of similar needs