Segmentation

“You want me to read all this, are pulling my udders”

Following and implementing marketing best practice is sometimes seen as luxury. However, it is increasingly becoming evident that those organisations that are failing to effectively segment their market are struggling in the new economic, technological, social and political environment.

When most people say “we need marketing”, what they mostly mean is “we need promotion.”

That was an adapted quote from Professor McDonald. Unfortunately, in my opinion, marketing as a discipline has lost some of its ground due to the fact that 80% of a marketer’s time and that of the organisation’s resources are taken up by promotion.

This has resulted in a situation where many organisations have reduced the marketing function to just promotion, sales support and Christmas party organisers.

The consequence of such has led to marketing losing, or being offered, a diminished role within the organisation’s core strategy making engine. This, coupled with an organisation’s often poor understanding of the central role, which market segmentation and positioning has on every corporate function, results in often non-homogeneous activity for activity’s sake.

Especially so when all an organisation has to communicate as a value proposition, is product/service features and benefits, and maybe the price and how to buy.

The above situation is often exacerbated by undifferentiated targeting strategies as a consequence of an organisation’s single marketing mix approach. The promotional element is the only variable process a marketing professional has any control over to achieve perceived, or actual concentrated or differentiated targeting, without resorting to product cost/price as a source of competitive differentiation.

However, all is not lost.

The current economic conditions could provide an opportunity for marketing to reclaim stakeholder leadership within an ever changing world. Although closer and more connected, markets have ironically become harder to reach and hold attention.

Value delivered to customers will come under increasing scrutiny and those organisations delivering actual or perceived value will survive and thrive; whilst those who are not delivering will be found out and fall short of their ambitions.

Market segmentation is designed to closely identify and understand customers’ needs, and in doing so, orientate an organisation’s ability to profitably sustain competitive market differentiation through a reciprocal value proposition mix.

Hence, market segmentation is the key towards marketing achieving real stakeholder leadership and regaining a core position within an organisation’s strategy machine.

There’s value in segmentation.

Segmentation Study Paper (Out in July 2010)

MAD Vision will study the interesting world of Dental Implants and present a paper illustrating how as an industry, it has misunderstood segmentation.

For this analysis is a result of an insight observation around the often complex restorative and aesthetic dental implant market, in which industry segmentation, targeting and positioning strategy has taken a certain route towards essentially ‘everyone doing the same thing’, thus making differential and sustainable competitive advantage difficult to attain.

Therefore, aimed at the dental implant sector, this analysis will attempt to illustrate an effective segmentation, targeting and positioning strategy within a closed-loop framework. Coupling key account management, marketing & communications, sales process and a customer relationship management system into a single strategy for sustainable competitive advantage and internal and external operational effectiveness.

By doing so, this analysis has the objective aim to highlight the consequential relationship between market segmentation and its central role and importance within every corporate function.