Market Segmentation Essay

1059 Words5 Pages
Paul Nicol 22103007 Discuss the advantages and disadvantages of using one variable to segment a market compared to a more complex multivariable approach. The facts and ideas in the essay are conducted to show the advantages and disadvantages of different strategies within a company’s segmentation process. Companies use segmentation to decipher which group to aim their product or service to. Segmentation is crucial within marketing and business as it allows a company to discover which direction to proceed in when it comes to customers’ needs and wants. In order to produce a valuable and necessary product or service, a company must decipher what product to produce and which criteria of customer it is aimed at. To do this, a company must segment the market in to different variables. There are advantages and disadvantages to using single or multivariable segments within a company depending on the company’s aims. Single variable segmentation uses one variable to segment their market such as age or sex. Certain companies choose this strategy as they are targeting a single large group. Many companies use this process such as Bentley and Armani. These brands aim their products at income and the higher class population as they are the customers who can afford their products. When a customer hears the name Bentley, they automatically associate it with the upper class. This builds a very positive reputation for the company and their product. Companies such as these often generate large profits as they can focus all their resources and efforts in to the one group’s needs. This also builds a reputation of a sterling product, and retaining customers. Single variable segmentation can have its advantages and disadvantages. Dibb and Simkin state that a single variable strategy is one that concentrates on a single segment, this is relatively
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