Small-Segment Marketing.

Small-Segment Marketing is an alternative route to avoid competing in a larger market. It helps firms become leaders in small markets by specializing and targeting at profitable Niches, a narrowly defined customer group with little or no interests to larger firms. Small-Segment Marketers has three tasks:

  • Creating Micro-segments
  • Expanding Micro-segment
  • Protecting Micro-segments

A firm entering new market should initially aim at micro-segment, rather than targeting the broad market.

 What does a Small-segment Market Look like?.

A small segment market is fairly small, but has size, profit and growth potential, and its unlikely to attract any other competitors.The customers have a distinct set of needs; they will pay a premium to the firm that best satisfy them; and the marketer gains certain economies through specialization.

A small-segment market plays by specialist role. The key idea of the small-segment marketing is specialization. Here are some possible small-segment initiative firm could adopt:

  • End-User Specialist: A firm could specialize in serving end-user-customers. For example, a value-added reseller could customize computer-hardware and software for customer segments and earn a price premium in the process.
  • Customer Size Specialist: A firm could concentrate on selling to either small, medium, or larger customers. Major niche marketers specialize at selling to small customers neglected by the bigger firms.
  • Specific customer specialist: A firm could limit its selling to one or a few customers. An agricultural input firm might specialize in selling poultry feeds to one or few poultry farms.
  • Geographic Specialist: A firm could specialize in selling only in a certain locality, region or area of the world. For example, a retailer could concentrate on selling only in one city. Everyday Emporium in Port Harcourt city is a good exemplar.
  • Job-shop specialist: A firm could customize its products for individuals. This is common in Fashion & Design Industry.

  • Quality-Price Specialist: A firm could specialize in producing and selling high quality products. HTC phone is a good example.
  • Service Specialist: A firm could specialize in offering one or more services, not available from other firms. a bank might take loan request on phone, and hand-deliver the money to the customers.
  • Channel Specialist:A firm could specialize in serving one channel of distribution. A beverage manufacturer might sell to wholesalers only.

However, small-segment marketing has a risk in that a small market might dry up or be attacked. The company is then stocked with highly specialize resources that might not have high value alternative uses. Because small segment-markets can be weaken, small-segment marketers must continually create new ones. Firms should stick to small segments but not necessarily one market. That is why multiple segment-marketing is preferable to single one. By developing strengths in two or more small-segment markets, firm increases its chance for survival.