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is better than its competitors” (Pettman, 1998). It is important to achieve competitive advantage because this means that you are providing a product or a service that is faster, cheaper, better or of a higher quality than anyone else. This means that more consumers will choose your company even if they can find a similar product/service elsewhere, leading to better business and higher profit margins. Dibb says that, “until competitors copy your segmentation, you have competitive advantage”. However, even if another company has the same segmentation strategy as you, it is still possible to have the competitive edge over them. This is achieved by knowing the market, which allows firms to identify competing products in their specific market and develop responsive competitive positions (Hoffman, 2002). Segmentation allows the business to become more in tune with the behaviour of both the customer and the competitor, which results in a better understanding of customers needs and wants. This allows greater responsiveness in terms of the product on offer (Dibb, 1998). The enhanced appreciation of the competitive situation also allows the business to better understand the appropriate segments to target and the nature of competitive advantage to seek (Dibb, 1998). However when segmenting markets, firms should not fail to consider that segments must be meaningful to customers and not just to the business, because otherwise this will lead to a failure to deliver homogeneous customer segments and the firm will not reap the full benefits (Nagpal, 2001).
Approximate Word count = 834
Approximate Pages = 3.3
(250 words per page double spaced)
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