Page 9 - Good brothers2

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Generally, segmentation is about identifying common characteristics
within a mass market and dividing customers into smaller segments
based on different needs that customers in different groups possess.
The task then is to select the segments that appear to represent the
strongest marketing opportunities within the resources available in the
organisation. Taking into consideration the simple Pareto principle
percent of customers, 20 where percent of profits come from just
there is a justified need to segment markets and create specifically
tailored marketing programmes. Instead of trying to reach the entire
market as a whole, selecting sub-markets where to concentrate
different activities should improve profitability. This approach is
more customer-orientated and competitor aware and leads to better
targeting and positioning programmes

A segmentation approach that considers a target market consists of
businesses or customers that are different and tries to identify groups
with similarities, is referred to as the build-up approach (ibid). In
this case the market can be seen to consist of four segments. When
the market affecting the case company’s product demand consists
of construction companies and independent electricity contractors
realizing electrification plans drawn by electricit ection of certain