Answer to Question #208972 in Management for Prabhdeep

Question

SUBJECT : SERVICE MARKETING

What specific challenges exist for the service organization when it comes to Market segmentation , explain by giving 7 challenges with elaboration ?

Answer 1

1. Production is limited: Consumers are restricted in each section. As a result, mass-producing products for each sector are not feasible. As a result, a corporation cannot benefit from large-scale production; economic scale is not viable. The product may be expensive, which will harm sales.

2. Production is Expensive: In both manufacturing and sales, market segmentation is costly. Producers must develop items of varied models, colors, sizes, and other characteristics to please diverse groups or segments of purchasers, resulting in higher production costs. Similarly, companies are needed to keep a huge inventory of products in many designs, colors, and sizes.

3. Marketing Is Expensive: Market segmentation also entails high-cost advertising. The marketer must evaluate all segments in terms of demands, interests, routines, preferences, and opinions due to the various groupings of purchasers. A marketer must devise and implement a variety of marketing tactics for various customer sectors.

4. Dispersion Difficulty: The firm must make distinct arrangements for each of the commodities required by various consumer groups. Recruitment, selection, coaching, remuneration, and incentives for salespeople are more challenging and expensive. For various consumer segments, the company must retain diverse channels and offerings.

5 . Significant Investment: Market segmentation leads to a lot of money being spent. A corporation must offer a variety of goods lines to suit the demands and desires of distinct groups. The organization will need to invest more in technology and other inputs that may be costly to do this.

6. Promotional Issues: Market segmentation exacerbates and produces promotional issues. It is self-evident that different segments are created based on distinct customer characteristics.

7. Stock and Storage Issues: The majority of limits are due to the influence of the scenario and the manager's failure to segment the market purposefully and meaningfully. Barriers, on the other hand, cannot be used to constrain segmentation philosophy and practice. These constraints can be circumvented by thoroughly and objectively segmenting the industry.