BC4 is a manufacturer of bedroom furniture with four factories in the south of the country. As a result of declining company financial performance, the Managing Director (MD) engaged a management consultant to conduct an overall review of BC4's activities and highlight the issues of greatest concern.
The management consultant's main findings are as follows:
- No systematic Quality Control exists and differing operating efficiencies exist both within and between BC4's factories;
- There is an enhancing incidence of furniture being returned which requires replacement or reworking. There are also a substantial number of items returned as part of extended guarantee arrangements;
- Currently BC4 tries to sell its full product range to all potential customers, even though it is geographically difficult to fulfil obligations to customers in the north of the country. BC4 requires to rethink this marketing approach and should undertake careful market segmentation.
Describe the advantages of market segmentation to BC4.
Market segmentation permits an organisation to focus on the subset of a market that has the greatest potential. There are clear advantages associated with the practice for BC4.
Develop appropriate marketing mix
The idea of dividing a market into segments is to recognize groups of potential consumers who have similar needs and will respond to a particular marketing mix in broadly same ways. Unsurprisingly, the management consultant has identified this approach. Segmentation will permit BC4 to concentrate on the right blend of the elements of the marketing mix that best meets the particular needs of its segment. The overall aim is to deliver the right products to the right customers using the right delivery channel at the right price and segmentation can assist this aspiration. A clear focus on a segment can lead Bc4 to get better the suitability of the product in terms of design. It can also improve communication to the target segment(s) using advertising and other promotional activities that are most relevant.