Step 10: Evaluation and Monitoring

Abstract

Market segmentation analysis does not end with the selection of the target segment, and the development of a customised marketing mix. As Lilien and Rangaswamy (2003, p. 103) state segmentation must be viewed as an ongoing strategic decision process. Haley (1985, p. 261) elaborates as follows: The world changes . . . virtually the only practical option for an intelligent marketer is to monitor his or her market continuously. After the segmentation strategy is implemented, two additional tasks need to be performed on an ongoing basis:1. The effectiveness of the segmentation strategy needs to be evaluated. Much effort goes into conducting the market segmentation analysis, and customising the marketing mix to best satisfy the target segment's needs. These efforts should result in an increase in profit, or an increase in achievement of the organisational mission. If they did not, the market segmentation strategy failed. 2. The market is not static. Consumers change, the environment, and actions of competitors change. As a consequence, a process of ongoing monitoring of the market segmentation strategy must be devised. This monitoring process can range from a regular review by the segmentation team, to a highly automatised data mining system alerting the organisation to any relevant changes to the size or nature of the target segment. Evaluating the Success of the Segmentation StrategyThe aim of evaluating the effectiveness of the market segmentation strategy is to determine whether developing a customised marketing mix for one or more segments did achieve the expected benefits for the organisation. In the short term,