4. Limitations
• Demographic analysis is helpful for identifying
market potential
• It is insensitive for predicting specific brand
choice
• Social class, reference group, family life cycle
have implications particularly for promotion
and distribution
5. Benefit Segmentation
• Discover the product characteristics
consumers use to distinguish between brands
• Discover other characteristics important to
consumers
• Survey for preferences for different
combinations of characteristics
6. Competitive Segmentation
• Basis for segmentation is the value/cost ratio
• A differentiated product is truly so only till the
emergence of the first follower.
• Measuring profitability by customer group is
important. Else major changes in competitive
positioning will go undetected.
• Segmentation is competitor specific.
Competitors choose parts of a segment.
7. Segmentation Strategy
• Focus on category specific attitudes
• Assessment of relationship between cost and
value by customer group
• Assessment of cost on a comparative basis with
select competitors
• Assessment of eventual effect on cost and
volume of changing the definition of the segment
- segment profitability
• Identify opportunities for action
