Market Segmentation — A Strategic Necessity?

Abstract

Not least amongst the emerging consequences of the sustained recession that has affected European economic life is an increasing willingness to make significant organisational changes. Such changes are often the most difficult to make, and may have long‐term as well as immediate implications for the whole nature of a business activity. Heller comments of ICI's recent reorganisation that “the retreat of ICI from its Millbank fortress to a far smaller London head office is…a landmark in the history of British Big Business”. Heller sums up the changes brought about by recession, that “small has become fashionably beautiful”, reasoning that large “size has been no protection against the intensified segmented competition which now… rules, and which demands companies organised round the sharp, marketing end”. What is wanted, he suggests, is a more responsive approach to organisation with small centres “exacting and monitoring results from separate, marketing‐oriented operations headed by individual chief executives, and with the growth markets separated out and properly, profitably exploited”. This article argues that the key to this changing view of what is effective organisation lies in Market Segmentation. This must be looked at from two viewpoints. To be effective as a policy concept, market segmentation must be both of functional use in determining product‐market scope (and hence in marketing planning), and contribute to the achievement of congruency between marketing strategy and other strategies, particularly for financial performance and operations management. Each of these requirements will be examined.

Citation

Morden, A.R. (1984), "Market Segmentation — A Strategic Necessity?", Marketing Intelligence & Planning, Vol. 2 No. 1, pp. 21-36. https://doi.org/10.1108/eb045693