Does Competition Increase the Need for Segmentation?

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Bhavani
Student (MBA), India

Does Competition Increase the Need for Segmentation?

When a market becomes more and more competitive, does that require more emphasis on market segmentation? In other words: is increasing competition conducive to segmentation?

  Jaap de Jonge
Editor, Netherlands
 

Competition Conducive to Segmentation

Does severe competition lead to use of market segmentation? I think in general terms, the answer to your question is: yes.
Why? Suppose we have a market with fierce competition (many/strong competitors). In such market, to still be able to survive, prosper and earn a lot of money, firms operating in that market may use segmentation to find an interesting (profitable) niche or profit pool were it does have some competitive advantage over the other firms.

 

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