Wednesday, June 1, 2016

What are the disadvantages of market segmentation? market segmentation

Market
segmentation is the process of breaking a market into segments and marketing a product in
different ways to those different segments.  It can also include coming up with different
products to sell to the different segments.  Market segmentation is usually seen as a good thing
because it allows firms to tailor their products and/or marketing approaches so as to do the
best job of appealing to each segment.

However, market segmentation can have
drawbacks.  The two most important examples are

  • It can be costly
    to identify all the different segments and then to spend the money to create different products
    and/or marketing schemes for each.
  • It can make it harder for the company to
    reach out to a broad range of consumers.  If the firm only makes products that appeal to small
    niches, it will be hard for it to become a widely-known and well-liked company across the whole
    population of consumers.  It might remain a small company, appealing only to small groups of
    consumers.

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