Segmentation and The Global Marketplace

During the last couple of years, segmentation has become increasingly important in developing, positioning, and selling products, due to the formation of a global marketplace and the competition within it. Nevertheless, this method is not a recent development but segmentation is used since at least the introduction of mass production. (Brandt, 1966, p.22) It was Wendell Smith, who introduced the concept of market segmentation into the marketing vocabulary in 1956. According to Smith, “segmentation consists of viewing a heterogeneous market as a number of small homogeneous markets in response to differing product preferences among important market segments. It is attributable to the desires of consumers or users for more precise satisfaction of their varying wants. Segmentation often involves the use of advertising and promotion and it is a merchandising strategy." (Smith, 1956, p.3) In order to adjust the product and marketing efforts to consumer or user requirements more precisely and rationally, a company can almost divide its market in as many ways as it wants. (Haley, 1968, p.30) However, the importance of segmentation can sometimes be overplayed and the use of this strategy can be questioned. A critical analysis becomes essential, which should incorporate a functional, intellectual, ethical and political viewpoint.

According to the functional critique, segmentation is analyzed for its qualification as a management problem-solving device. It involves an evaluation of outcomes, and challenges the validity and efficacy of segmenting a market. (Hackley, 2009, p.12) As a matter of fact, segmenting a market is not necessarily a guarantee for success, as the different segments have to posses certain characteristics, such as havi...

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