haagen-dazs
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In the competitive world we live in today, it is extremely difficult to run a profitable businesses by trying to cater for the needs of all consumers. Therefore, "there is a need to separate markets into distinct groups based on similar characteristics" and cater to those target markets alone (Hoffman, 2002). This is known as market segmentation. This essay will start by discussing how segmentation can achieve competitive advantage, then move on to the implications it has for product planning and then finally talk about the changes to the segmentation approach over the product life cycle.
In recent years, customer needs have become increasingly diverse. These needs can no longer be satisfied by a mass market approach (Dibb, 1998) and so by focusing marketing efforts on specific segments, the firm satisfies its customers and fosters repeat business (Barich, 1992). A firm has competitive advantage when "it uses its core competencies to provide a product or a service that is better than its competitors" (Pettman, 1998). It is important to achieve competitive advantage because this means that you are providing a product or a service that is faster, cheaper, better or of a higher quality than anyone else. This means that more consumers will choose your company even if they can find a similar product/service elsewhere, leading to better business and higher profit margins. Dibb says that, "until competitors copy your segmentation, you have competitive advantage"...