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Main Tools for Market Segmentation

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Hence a survey is required to be carried out to find the perceptions of the targeted segment and to give it credibility; both Positivist and Post-Positivists Methods should be applied. Method refers to the research tactics used in the conduct of a research effort. Examples include drawing samples, conducting questionnaire surveys, engaging, and participating in observations.   Positivist methods are based on Descriptive and Experimental Research. Their justification lies in Internal and External reliability of content and Validity through Random and Deliberate sampling of data. In the case of Post-Positivist Research, the method adopted are Naturalistic Inquiry and Narrative Inquiry.

Here the justification is based on Trustworthiness, as the result is credible, confirmable, dependable and transferable. It is further validated by the fairness of the research. The reason for adopting a mix of both methods is that while in Business and Management researches, the quantitative or the numerical approach to analysis is based on Positivism unless this is qualified by qualitative means (post-positivism), the numbers alone can often be misleading. For instance Sales figures of a particular time period are of little value unless they are further divided into sales of individual items with prices and costs for each treated separately, from which the contribution to profit or loss of each item can be found.

5 Analysis – Benefits of Segmentation Segmentation offers great advantages to a company. The obvious ones are: Reduction in expenses – the direct result of targeted customer strategies. Improved cash flow – advertisements are segment oriented only. Improved productivity – easier to produce for specified products. Improved manufacturing quality – this is a result of the standardization of products.

Improved service delivery – schedules for fewer goods are easy to achieve. Improved employee working conditions/benefits – employees with skills will benefit from this. Improvement in market share – the result of customer loyalty. Segmentation improves the image of the company and customer recall is higher. This is the ultimate benefit the managers look for. This is also to the advantage of the stakeholders, both employees as well as shareholders. 6 Examples A prime example of segmentation is found at Tesco. Tesco had introduced Loyalty schemes in mid-nineties in collaboration with Dunnhumby Ltd.

Who pioneered these schemes with a customer-centric approach. As a result, Tesco introduce the Tesco Club card that became a huge success.

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