Page 122 - MYM 2016

Market Segmentation: Still the bedrock of commercial Success
In light of the phenomenal advancements in marketing technology, it is important to dispel some of the popular myths surrounding market segmentation and explain why needs-based segmentation is still the main route to commercial success.
bY MalcolM Mcdonald
The most common objective of modern com- mercial organizations is the sustainable creation of shareholder value.
is can be achieved only by providing shareholders with a total return, from capital growth and dividend yield, that exceeds their risk-adjusted required rate of return for this particular investment. In today’s highly competitive environ- ment, the major sources of shareholder value creation are the intangible mar- keting assets of the business, such as brands, customer relationships and
channels of distribution, the 70% of the company’s value that does not appear on the traditional balance sheet (see Figure 1 below). Consequently, the critical future marketing strategies of
a company, which indicate how these assets are to be developed, maintained and exploited, are the role of properly trained marketing specialists, not some- one playing around with technology.
So a changed approach is necessary, which entails getting back to basics, and this represents a major opportunity for our community.
It can be seen that market/customer
fig. 1: the role of segmentation in creating shareholder value added (sVa): asset breakdown for the top 10 countries by enterprise value (UsD millions, 2015), ranked by tangible net asset %
122 | MINd YOUr MarkETING OCTOBEr 2016