4.2 A firm such as Unilever serves many different market segments through a wide

Question

4.2 A firm such as Unilever serves many different market segments through a wide variety of products that caters to each market segments needs. In evaluating different market segments, Unilever, must look at two factors: The segment„s overall attractiveness and the company„s objectives and resources. In relation to the above statement determine using relevant marketing strategy how a firm such as Unilever would assess the viability of different market segments .

Discuss market segmentation and its use with a firm such as Unilever in formulating segmentation strategies such as measurable / identifiable,accessible,substantial,differential and actionable.

Discuss in detail.

Explanation / Answer

Criteria for selecting Market Segments

Measurable
A segment should be measurable. It means you should be able to tell how many potential customers and how many businesses are out there in the segment.

Accessible
A segment should be accessible through channels of communication and distribution like: sales force, transportation, distributors, telecom, or internet.

Durable
Segment should not have frequent changes attribute in it.

Substantial
Make sure that size of your segment is large enough to warrant as a segment and large enough to be profitable

Unique Needs
Segments should be different in their response to different marketing efforts (Marketing Mix).

Consumer and business markets cannot be segmented on the bases of same variables because of their inherent differences.

Market segmentation is the process through which a company differentiates its market according to wants, locations, buying attitudes and buying practices of consumers. The company claims that LUX is the highest selling beauty soap in the country. Moreover a survey carried out by group members in different locations of city; both posh and poor areas expose the same result. Though LUX is the highest selling beauty soap in the country but it does not go for traditional mass marketing. Moreover as a beauty soap LUX does not even segment its market according to gender or age group. They segment their market according to geographical area i.e. urban, sub urban and rural area consumers. They further differentiate these segments according to Psychographic Segmentation. The Psychographic Segmentation divides the population in five segments; urban rich, urban and sub urban upper middle class and middle-class people or family. Urban rich categorizes the highly educated and top class service holders whereas incase of the Rural class category the opposite is true

A research carried out by Unilever reveals that urban rich people are more likely to buy imported and expensive products. Moreover rural poor people tend to buy cheap products even without evaluating its quality. However urban and sub urban upper middle and middle class people tend to buy affordable and quality products. LUX is not a highly expensive but an affordable product. That is why Unilever targeted urban and sub urban upper middle and middle class people who are basically the highest population . From the segmentation of customer according to Psychographic Segmentation they target categories are urban rich, urban and sub urban upper middle class and middle class people, because they assumed to be financially well off and can afford to buy LUX. However survey reveals that a small portion of urban rich and a comparatively bigger portion of rural poor people are using LUX.

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