Section 1: Introduction this section should be brief and should indicate to the reader

how you are going to approach the assignment (approximately 150words).

Section 2: An overview or summary of the article on Segmentation this section

should briefly discuss the article, whilst highlighting the key marketing issues stemming
from the article. For example, some of these issues could be traditional segmentation
bases the article discusses the role of segmentation in marketing and the traditional
techniques used for segmentation ; Benefits of segmentation the article discusses the
dynamic nature of the business environment and the need to be more competitive.
Segmentation plays a vital role in achieving competitive advantage ; Variables used for
segmentation the article discusses the future challenges and examines the current
variables used for segmentation. It suggests the need to use these variables more
effectively, through a greater understanding of the consumer segments .(Approx. 300
words)

Every company want to focus on customers within their capacity and with customers intimacy .
For this market is to divide into groups of consumers or segments with distinct needs and wants.
This strategy of dividing the market in homogenous group is known as segmentation. Even
companies, who have mass marketing phenomena, are now adopting this new worlds strategy
i.e. segmentation. The purpose of segmentation is the concentration of marketing energy and
force on subdividing to gain a competitive advantage within the segment. Its analogous to the
military principle of concentration of force to overwhelm energy. Concentration of marketing
energy is the essence of all marketing strategies and market segmentation is the conceptual tool
to help in achieving this focus.
Market segmentation was first put forward in the middle of 1950s by Wendell.R.Smith, an
American professor of marketing. Market segmentation is to divide a market into smaller
groups of buyers with distinct needs, characteristics, or behaviors who might require separate
products or marketing mixes.
(Charles W. Lamb 2003). Segmentation is the process of dividing the market into groups of
customers or consumers with similar needs. The more closely the needs match up, the smaller the

segment tends to be, but the higher the premium customers are likely to be prepared to pay to
have a product that more exactly meets their needs (Blythe, 2003). Segmentation allows
marketers to identify distinct groups of customers whose behaviours significantly differ from
others. This allows firms to adjust their marketing mix, to cater to particular needs of different
market segments. Four segmentation bases have emerged as the most popular in segmentation
studies (Kotler, Armstrong, Saunders, & Wong, 2002): geographic segmentation (i.e. markets
segmented by geographic region, population density or climate); demographic segmentation (i.e.
markets segmented by age, sex, size and family type, etc.); psychographic segmentation (i.e.
markets segmented by life-style variables); and behavioural segmentation (i.e. markets
segmented by purchase occasion, benefits sought, user status). The segmentation base chosen to
subdivide a market will depend on many factors such as the type of product, the nature of
demand, the method of distribution, the media available for market communication, and the
motivation of the buyers (Chisnall 1985).
Steps in Market segmentation
According to Charles W. Lamb and Carl McDaniel (2003,), the first step in segmenting markets
is to select a market or product category for study. It may be a market in which the firm has
already occupied a new but related market or product category, or a totally new one. The second
step is to choose a basis or bases for segmenting the market. This step requires managerial
insight, creativity and market knowledge.
There are no scientific procedures for selecting segmentation variables. However, a successful
segmentation plan must produce market segments which meet the four basic criteria:
substantiality, identifiably, accessibility, and responsiveness. The third step is selecting
segmentation descriptors. After choosing one or more bases, the marketer must select the
segmentation descriptors. Descriptors identify the specific segmentation variables to use. The
fourth one is to profile and analyze segments. The analysis should include the segments size,
expected growth, purchase frequency, current brand usage, brand loyalty, and long-term sales
and profit potential. This information can then be used to rank potential market segments by
profit opportunity, risk, consistency with organizational task and objectives, and other factors
which are important to the company. The fifth step is to select target markets. This step is not a
part of the segmentation process but a natural result of it. It is a major decision that affects and

often directly determines the firms marketing mix. The last one is designing, implementing and
maintaining appropriate marketing mixes. The marketing mix has been described as product,
distribution, promotion and price strategies which are used to bring about mutually satisfying
relationships with target markets.
Bases of Market Segmentation Strategy:
Consumer market can be segmented on the following customers characteristics:

2004)

Geographic
Demographic
Psychographic
Behavioural
Craft, Stephen Show in his study that in general, customers are willing to pay a premium

for a product that meets their needs more specifically than does a competing product. Thus
marketers who successfully segment the overall market and adapt their products to the needs of
one or more smaller segments stand to gain in terms of increased profit margins and reduced
competitive pressures. Small businesses, in particular, may find market segmentation to be a key
in enabling them to compete with larger firms.
The formula - segmentation, targeting, positioning (STP) - is the essence of strategic marketing."
(Kotler1994). This application of market segmentation serves the purpose of developing
competitive scope, which can have a "powerful effect on competitive advantage because it
shapes the configuration of the value chain." (Porter 1985).
Through market segmentation the firm can provide higher value to customers by developing a
market mix that addresses the specific needs and concerns of the selected segment. Stated in
economic terms, the firm creates monopolistic or oligopolistic market conditions through the
utilization of various curves of demand for a specific product Category (Ferstman C., & Muller
E., 1993).
Amandeep singh (2010) in his study highlights the need of using a new theoretical foundation of
market segmentation which will help the FMCG companies to segment the market in
competition oriented marketing to gain fruitful results

Section 3: An evaluation of the article on segmentation using other articles -this is

the main body of your work and you will be expected , in this section, to demonstrate

your knowledge in the subject matter, and your ability to identify and use relevant
sources of information effectively. Your evaluation should include at least two other
related journal articles, chosen by yourself. Your choice of the other articles to use in your
evaluation should be dependent on how well these articles will help you put forward a
balanced critique of the article, especially the authors concluding statements on
Segmentation. (Approx. 850 words)
For the purpose of evaluation on segmentation here in this part I have used three articles on
segmentation by Premkanth Market Segmentation and Its Impact on Customer Satisfaction with
Especial Reference to Commercial Bank of Ceylon PLC. (2012) second article from Hultn, B.
(2007). Customer segmentation: The concepts of trust, commitment and relationships and the
last one from Lynn, M. (2011). Segmenting and targeting your market: Strategies and
limitations.
Different consumers have varying desires and interests. This variety stems from diverse buying
practices and basic variations of customers' needs and the benefits they seek from products. It is
almost impossible to satisfy all customers in a market with a single product or service.
Companies have responded by offering a proliferation of products and brands. Increasingly,
therefore, companies have found it essential to move away from mass marketing towards a target
marketing strategy where the focus is on a particular group of customers. This identification of
target customer groups is market segmentation, where customers are aggregated into groups with
similar requirements and buying characteristics. The Henry Ford Model "T" philosophy you
can have any colour as long as it is black is no longer an appropriate one! Even some of the
last remaining bastions of mass marketing have fallen, adopting for a variety of reasons a
target marketing approach based on clearly defined market segments.
Market segmentation is one of the most fundamental marketing theory concepts, in terms of
matching supply with demand and constituting an important component of a firm s marketing
strategy. The concept of segmentation was originally related to economic theory, stating that
competition is imperfect and that either the lack of homogeneity or close similarity among
products is quite evident. For this reason, market segmentation and product differentiation were
seen as consistent with the framework of imperfect competition. The segmentation concept was

originally developed by American manufacturers in order to move away from mass marketing in
consumer markets in terms of all being the same. The segmentation concept can be applied to an
investigation of how consumers perceive market structures. The aim should also be to learn more
about how consumers perceive the various different brands or products with respect to their
strengths, weaknesses, the satisfaction they provide and so on. Finally, it should be possible to
integrate and apply the findings strategically in developing and implementing a marketing mix
that creates a market position in the minds of the consumers. In a market-oriented strategy, target
marketing is distinguished from mass marketing in terms of targeting specific customers in a
particular segment. Some researchers have argued that there is a lack of a generally acceptable,
validated means of identifying and segmenting markets
The paper of Premkanth in this he reviewed a articles Marla Royne Stafford (1996) which stated
that demographics continue to be one of the most popular and well-accepted bases for
segmenting markets and customers. Even if others types of segmentation variables are used a
marketer must know and understand demographics to assess the size, reach and efficiency of the
market. The general conclusion of this study is that there is a significant relationship between
demographics characteristics the service quality perception. However, for income the test
statistic was not significant.
The psychographic segmentation, in the literature, has been extensively researched. For example
Beckett et al. (2000) presents and develops a model through which attends to articulate and
classify consumer behaviour in the purchasing a range of financial products and services. Using
and placing the two principal factors that motivate and determine individual contracting choices,
namely involvement and uncertainty.
Harrison (1994) concludes that the traditional segmentation variables of age, stage in the family
life cycle and social class have provided little insight into the financial services customer
behavior. Machauer and Morgner (2001) prefer segmentation by expected benefits and attitudes
could enhance a banks ability to address the conflict between individual service and cost-saving
standardization. Using cluster analysis, segments were formed based on combinations of
customer ratings for different attitudinal dimensions and benefits of bank services.

Four types of segmentation have emerged as the most well known in B2C markets. These are
geographic, demographic, psychographic and behaviouristic segmentation. Also, other criteria
have been used, including product usage rates, lifestyle and brand personality. Moreover, in
contrast to market segmentation, customer segmentation is related to a classification of potential
and current customers, based on their market reactions. The development of the segmentation
concept during the last decades entails a shift from market segmentation to customer
segmentation. The concept has become two dimensional, with an emphasis on market
segmentation at the business strategy level and customer segmentation at the customer strategy
level in a CRM perspective.
The conclusion that I reach here is that most markets are segmented enough to support broad
product subtypes but not segmented enough to support more narrow differences between brands
within those broad product subtypes. After decades of competition, most if not all of the viable
segments have been identified with numerous competitors vying for each. Those competitors
within a product subtype end up competing for the same customers because more refined
segments either do not exist or are not profitable. This explanation suggests that efforts to
segment most highly competitive, well-developed, and stable markets are unlikely to identify
useful new segments or targeting opportunities. The time for new segmentation efforts is when
markets are new or have experienced some recent and fundamental change.

Section 4: An application of your evaluation to the Omani market. In this section,

you have to demonstrate your ability to relate your arguments in section 3 to the Omani
market. My preference for the Omani market is based on the fact that your second
assignment is on the Omani market. This way, you will be already familiar with some of
the key issues, such as competition, consumer behaviour, and segmentation relating to
this market. (Approx. 500)

Oman is a member country of the Gulf Cooperation Council (GCC) together with Saudi Arabia,
Kuwait, UAE, Qatar, and Bahrain. According to the 2003 census, Oman has a total population of
4.0 million comprising 56% Omani and 44 % expatriates and a total gross domestic product of

$20.15 billion (Oman, 2006). Administratively, Oman is divided into eight governorates/regions
and Muscat Region accounted for 21.4 % of total Omani population. Oman has a large and
growing proportion of young people in 2003, 93.25% of the population is under 55 years old.
While the Quran acknowledges social stratification, numerous passages in the Quran and Al
Hadith warn against such practices as cheating, swindling, deception, beguilement, and
monopoly. These practices are prohibited in Islam because they have the potential to
disadvantage certain groups and thus inflict harm on the community at large. Prophetic guidance
on these issues has a cumulative effect of maintaining balance, distributive justice and equality of
opportunities (Hafizah, 2001). While these issues may impact pricing, and even distribution
strategies, they do not seem to impact marketing communication and segmentation strategies.
Islam may encourage the use of socio-economic factors such as income and family social status
as segmentation tools but, one may argue that Life-style segmentation or Psychographics may
not be relevant given the uncompromising Islamic philosophy regarding the pattern of life as a
whole (Abdeen and Shook, 1984).
Gender and Ethnicity are two obvious traditional forms of segmentation in Islamic markets.
According to Patai, (1973), The traditional Arab world is divided into two hemispheres, that of
the men and that of the women, which meet only in the privacy of the home, p.192. Therefore, it
is only natural to expect that businesses utilize different marketing communication vehicles to
reach women, and potentially different marketing and sales strategies all together.
Ethnicity is another logical segmentation tool in the Islamic world. In the United Arab Emirates
as in many of the Islamic Arab states, a large number of non-nationals live in these countries,
often as servants or hired hands. Of the 4.0 Million residents of the Oman, only 56% are
nationals, while the remaining 44% are expatriates. Ethnically, the Oman market is indeed a
market of two segments: The nationals who consume over Eighty percent of the goods and
services, and the expatriates who save their money to send to their families, but consume
temporary and sustaining products and services while at the Oman.
The cultural diversity in the Middle East (the Oman in particular), along with the constant
fluctuation of foreign residents coming and going every few years, creates a type of market
vitality that should encourage companies operating in the region to regularly revise their market
segmentation techniques.

To deal with the challenging cultural diversity in the Gulf region, many companies begin their
market segmentation process by dividing consumers geographically among three major regions
(Arab, Asian and Western), and then proceed to the regular demographic sub-segment
categorization that addresses each target group through its own particular medium.
The interview with one of the major mall in Muscat relieved that the role of segmentation in
development of their marketing communication strategies and defined three steps. First,
segmentation variables were identified, markets were segmented and profiles were developed for
each segment. Then consumers were categorized according to different characteristics, such as
purchase habits, ethnicity, and locality. The second step involved the evaluation of each segment
according to attractiveness to company resources and assets, resulting in selection of target
segments. And finally, the last step, involved identifying and selecting possible communication
themes and promotional concepts for each target segment - essentially, positioning the product,
service or brand appropriately for the targeted segment and independent from competitors.
Benefit segmentation is another alternative approach or technique for segmenting retail
customers that aggregate customers on the basis of benefits their desired or sought. The benefits
sought by Omani shoppers was found consist of eight dimensions: Getting job done;
Convenience; Monetary saving; Time saving; Enjoyment; Relaxation; Freedom; and
Recognition. This information should be useful to managers in developing and orientating retail
formats to meet the needs of Omani shoppers. (Mahmood, 2012)
Family income, for example, used to be a key determining factor of consumer purchasing
behaviour. However, the widespread application of credit card installment payment plans offered
by banks has motivated large numbers of consumers to surpass their predetermined purchasing
profiles to acquire products that are beyond their normal financial means.
When it comes to market segmentation, many companies in the region tend to apply some sort of
polarizing approach to society. However, the reality is more vibrant than these companies realise.
Middle East consumers today have become more unpredictable and markets are heavily affected
by consumer behaviour and lifestyle factors. Consumer profiles are evolving at a more rapid rate
than that determined by traditional market segmentation methods such as mere geographical
clustering, revealing that consumers are looking to purchase offers that go beyond their known
price thresholds.

Section 5: Conclusion and/or recommendation(s). Your conclusion and

recommendations should stem from your main deductions from your evaluation. Usually,
most of your recommendations would emanate from your viewpoints on the article.
(Approx. 200words)
Companies that operate in the Oman should change how they apply market segmentation
and contemplate the benefits of switching from an absolute 'given data' method to a
'functional tool' technique. When launching new products (or even when running a
promotional campaign), instead of addressing each segment as an isolated pillar,
marketing executives need to consider a mix and match method; bringing together a
number of sub-segments with certain shared commonalities and using a single approach
to address them.
Moreover, marketers in the Oman can use tested instruments developed in the west and
adapt them for reliability and validity of their research. After Wells developed the AIO
instrument, many researchers developed their own, resulting in low reliability and
validity scores. It was apparent from the participants responses that in the Oman, where
Islam is the dominant religion, that market segmentation is not deemed a negative
business practice. Hence, marketers might consider using tested instruments modified for
research findings that truly reflect the market segments that exist.

References:

Abdeen, M. Adnan, and Dale N. Shook (1984) The Saudi Financial System, New York,

John Wiley & Sons.

Ali, S. (1983). Islam Economy & State, Cairo: Dar Alama Inc.
Demby, D. (1974), Integrated Marketing Communications. Chicago: NTC Business

Books.
Hafizah, S. (2001). The World Of Islamic Finance, Investment, Information: Monopoly

In The Eyes Of Islam from the World Wide Web: http://www. Islamiq.com
Hultn, B. (2007). Customer segmentation: The concepts of trust, commitment and

relationships. J Target Meas Anal Mark, 15(4), pp.256-269.

Lynn, M. (2011). Segmenting and targeting your market: Strategies and limitations
[Electronic version]. Retrieved [insert date], from Cornell University, School of
Hospitality Administration site: http://scholarship.sha.cornell.edu/articles/243

Mahmood Hajjat (2012) Benefits Sought by Grocery Shoppers: An Exploratory

Study in Oman, Sultan Qaboos University, Oman.

Maslow, D (1954), Developing and Testing a Model of Psychographic Market

Segmentation. New York: acMillan, 184-94.

Middle East Institute ( 1971) , People, Power and Political Systems: Prospects in the

Middle East. Washington DC., 30-43.

Mitchel, A. (1983), The Nine American Lifestyles, New York: MacMillan.
Premkanth Market Segmentation and Its Impact on Customer Satisfaction with Especial
Reference to Commercial Bank of Ceylon PLC. (2012). Global Journal of Management

and Business Research, 12(17), p.9.

Reynolds, T. and Martin, B. (1974). On Comparing Alternative Segmentation Schemes:
The List of Values (LOV) and Values and Life Styles (VALS). Journal of Consumer

Research, 17, 105-109.

Schumpeter, Joseph A. ( 1934) The Theory of Economic Development, Cambridge,

Harvard University Press.

Wells & Tiget (1971), Changing Lifestyles ad Psychographics The Challenges Current
Facing Research. London: International Business Communication, Ltd, 10-11.