Segmentation would serve no purpose, if the target customers can’t be reached. Suppose a fast food company has identified the college canteens to be a good segment, but if the colleges do not permit the fast food to supply or serve college canteens, the segmentation would serve no purpose. Similarly, Cuban rum and cigar can’t reach American market due to political and traderelations.
The basis used to distinguish market into segments must lead the company to show clear variations in preferences, needs, and consumer behaviour in response to different marketing mixes designed individually for each segment. Thus, division into segments would enable a comparison with regard to sales, cost and profits. At least one segment must have enough profit potential to justify “developing and maintaining a special marketing mix for that segment.
The basis used should lead to segments that are so large to be economically and practically viable to be served. Viability depends upon size and sustainability, (enough volume), identity (unique characteristics), relevance and usefulness (relevant to important characteristics), measurability (measured), access (not too difficult and too costly to reach to them), and stability (stable in short, medium and long term).
Segment so chosen has to be unique so that it can be distinguished from other market segments.
The segment must be appropriate to the objectives and resources of the organisation.
Exxon Mobil during 1993-2006 had three segmentation principles validated in the marketplace. First, simpler segmentation, which tends to be more robust, flexible, and cost effective over the long term; second, it must reveal both where customers are now and where they are going, so that the company can put the same face before the customer in Cairo or Illinois; and third, segmentation analysis and strategy must be updated regularly.