Question

which factors the markets must consider in making a choice between single stage segmentation and second-stage segmentation?

Answer 1

Factors influencing the Choice of the Market Targeting Strategy

Which market targeting strategy is chosen depends on many factors. None of the strategies above works best in every situation. Rather, the market targeting strategy depends on several characteristics of the company. When choosing a market targeting strategy, the company should consider:

• The company’s resources. If resources are limited, a concentrated market targeting strategy might make more sense.
• The degree of product variability. In case of uniform products, such as apples or steel, undifferentiated marketing may be more suited. In case of products that can vary in design (cars, cameras etc.), more narrow differentiation and concentration is suitable.
• The product life cycle. When a company introduces a new product, it may be helpful to launch only one version. Undifferentiated or concentrated marketing might make most sense. In the mature stage, a segmented market targeting may be appropriate.
• Market variability. If you talk about a kind of product where all buyers have the same tastes, buy the same amounts etc., undifferentiated marketing makes sense.
• Competitors’ marketing strategies. If competitors apply differentiated or concentrated market targeting strategies, using undifferentiated marketing may prove to be fatal. However, the firm might also gain an advantage by using a different market targeting strategy than competitors, especially if it can serve individual customers better by meeting their needs. Then, a concentrated market targeting strategy or micromarketing will work best.