Heterogeneity And Segmentation

Heterogeneity and diversity fill in an entire target market or in other words, in the group of probable consumers of a product. For example, consumers of laptops do not merely include those individuals looking for a portable alternative to desktop computers. Some of them might want a cheap entry-level laptop while others want those expensive high-performing ones. There are also those who might consider large screen displays while others prefer those ultra-portable variants that they can easily carry around. This example illustrates heterogeneity and diversity based on variety in product preferences. Of course, aside from preferences, difference in demographics and psychographics create heterogeneity and diversity. Nonetheless, the dissimilarities within and across the members of the broad target market require a so-called segmentation in order develop and implement specific strategies and tactics that would best exploit the specific group of consumers.

Segmentation is a marketing strategy. By definition, segmentation pertains to the process of dividing or splitting a broad target market into various subgroups based on so-called market segments particularly by categorizing them according to common needs, wants, and priorities and based on the likelihood of exhibiting similar purchase behavior (Burkard, 2013). It is important to note that the segmentation of a broad target market does not happen abruptly. Book authors Michael Wedel and Wagner A. Kamakura (2000, pp. 4-5) mentioned that segmentation should satisfy six criteria to include identifiability, substantiality, accessibility, stability, responsiveness, and actionability. The purpose of these criteria is not only to define a market segment but also make sure that such remains...

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.... In this case, segmentation helps the company create its identity and establish its specialization.

These detailed examples of the applicability of segmentation thereby illustrate its importance in marketing and thus, the importance of marketing in corporate strategy. Note that product development, positioning strategies, pricing strategy, and differentiation strategy are all concepts that fall within the principles and practices of marketing. From the examples above, it is easy to gather the fact that segmentation can help a business organization understand not only the needs and wants of the customers, but also its focus and direction or in other words, its own needs and wants. This two-fold understanding helps a company find its place among the muddle in the market caused by the heterogeneity and diversity across the target market, and existence of competitors.