Market segmentation is a way for government agencies and businesses to analyse the best way in which to promote and, in the case of businesses, to sell their products. Government and industry tend to keep to standardized segmentation schemes, but businesses very often create their own in order to meet their own needs and requirements.
There are a variety of ways for a business to implement segmentation, helping them to make a decision on how it should market its goods and services. Techniques include offering a limited number of products to a large populace; or conversely, a large number of products to a small populace. This latter example is often frowned upon because it can lead to a company stretching itself too thinly. Resultantly, rather than being very successful in one area, they will only enjoy moderate success in many areas (or not even this, in some circumstances).
The limited products to a large populace method of segmentation (or the ‘one-to-many’ model) is intended to keep a business focused, and enables them to be able to take advantage of economies gained through high production of only one product.
This is an example of how Coca Cola used market segmentation on a product called Dasani - a bottled form of water. Unfortunately it was doomed to failure because when Coca Cola tried to market it in the UK, it tried to position this product alongside mineral waters from other producers, when it actual fact it is only a purified form of tap water. The result was a huge scandal and tales of contamination in the media, and Coca Cola’s market segmentation in this instance was a disaster, meaning that they had to exit the market and discontinue the brand.
There are a variety of ways for a business to implement segmentation, helping them to make a decision on how it should market its goods and services. Techniques include offering a limited number of products to a large populace; or conversely, a large number of products to a small populace. This latter example is often frowned upon because it can lead to a company stretching itself too thinly. Resultantly, rather than being very successful in one area, they will only enjoy moderate success in many areas (or not even this, in some circumstances).
The limited products to a large populace method of segmentation (or the ‘one-to-many’ model) is intended to keep a business focused, and enables them to be able to take advantage of economies gained through high production of only one product.
This is an example of how Coca Cola used market segmentation on a product called Dasani - a bottled form of water. Unfortunately it was doomed to failure because when Coca Cola tried to market it in the UK, it tried to position this product alongside mineral waters from other producers, when it actual fact it is only a purified form of tap water. The result was a huge scandal and tales of contamination in the media, and Coca Cola’s market segmentation in this instance was a disaster, meaning that they had to exit the market and discontinue the brand.
