What Are The Requirements Of Effective Segmentation?

The five main requirements of a market segment to ensure that it is effective are that they must be measurable, actionable, accessible, substantial and differential. If each of these requirements are met a market segment then market segmentation is likely to occur in a successful and effective way.

• Measurable. A market segment must be measurable in terms of its size in purchasing power and profiles. While there are some aspects of segmentation that are difficult to measure, wherever possible it is a process that should be doable.
• Actionable. In order for effective segmentation to occur a market segment must also be actionable. This means that effective programs can be designed for serving and attracting the segments.
• Accessible. A market segment should also be accessible, i.e. They should be easy to reach and serve.
• Substantial. For effective segmentation, a market segment should be large or profitable enough to serve. They should be the largest possible homogeneous group that is worth pursuing with a marketing program that has been tailored.
• Differential. Market segments need to be distinguishable conceptually and must respond in different ways to the different marketing mix programs and elements.

These requirements help determine whether market segments will contribute towards effective segmentation or not. Breaking down the requirements into these categories allow them to be analyzed and addressed individually to make the process as efficient as possible.

An effective process of market segmentation makes it possible to break down people or organizations into sub sets that share one or more characteristics. This causes them to demand a product or service that is based on qualities of these functions.

While market segments may be theoretically 'ideal', they are actually developed quite differently by different organizations. These ideals are developed in accordance to a product differentiation strategy in order to give a company a temporary commercial advantage.

To be maximally useful, market segments must exhibit five characteristics:

1. Measurable and Obtainable: The size, profile and
other relevant characteristics of the segment must be measurable and obtainable
in terms of data. If the information is not obtainable, no segmentation can be
carried out. 

2. Substantial: The segment should be large enough
to be profitable. For consumer markets, the small segment might
disproportionately increase the cost and hence products are priced too high. 

3. Accessible: The segment should be accessible
through existing network of people at an affordable cost.

4. Differentiable: The segments should be different
from each other and may require different 4Ps and programs. 

5. Actionable: The segments which a
company wishes to pursue must be actionable in the sense that there should be
sufficient finance, personnel, and capability to take them all.

Must be
1.measurable-the size, purchasing power
2. Assessable-reached and service
3. Substantial- profitable and homogeneous
4. Differentiable-
5. Actionable-

Suppose you are a product manager and you are listening to new sandwich wrap idea and its your turn to ask question which should be directed toward one of the five segmentation requirement