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Selection of Market Segment | Single Segment Coverage and Multi Segment Coverage Market

After evaluating market segments, the suitable market segments should be selected to enter there. Analysis of market segments, market coverage, ethical considerations, inter-segment relationship etc. also should be considered for the selection of suitable market segments.

Factors to be considered to select market segments


1. Market Segment Analysis

At first market segments should be analyzed for selecting the best market segments. While analyzing the market segments, their size, growth rate and long-term profitability should be studied carefully. Besides this, weak and strong aspects of present and possible competitors should also be studied and analyzed.
Information about possible market mix, possible total demand, weak and strong aspects of competitors, opportunities and threats of market segments, brand loyalty of customers, means and resources necessary to face threats in the market segments etc. should be collected and analyzed. Only then the selection of market segment becomes effective.

2. Market Coverage


Market coverage plays a vital role to select the best market segment. Alternatives of market coverage are as follows:
  • Single segment coverage: Single market segment coverage is market centered strategy. Under this strategy, a company selects only one market segment and prepares marketing mix for this.

Single segment coverage

In the above example, the company has taken single segment coverage and has selected only one market segment D from A – J segments. Adopting such centralized strategy the company gets both benefits and loss. Its positive aspects are achievement of specialization in market segment, effective marketing mix, increase in reputation/goodwill etc. whereas no distribution of risk, not to be able to go to more attractive market segment from less attractive segment etc. are its negative aspects.

  • Multi segment coverage: In this alternative, a company selects two or more segments at a time and prepares separate market strategies accordingly. This strategy helps the company to distribute risk in different market segments. In this, the company becomes successful to promote sale and earn profit. While adopting multi segment coverage, it becomes easy for the company to go to more attractive segment from less attractive ones. But this strategy is more expensive. Preparing separate strategies for each marketing mix becomes costly.

Multi segment coverage

In the above example, the company has taken multi segment coverage alternative and has selected several market segments – B, E, G and J.

  • Product specialization: In this alternative, the company sells one types of product in several market segments. In other words, the company supplies only one kind of product to many market segments. The company uses slightly different marketing mix for each market segment. While adopting such strategy, the company can achieve specialization in one product. Marketing mix can be changed in less expense and risk is distributed in different segments.

Product specialization

From the above example, ABC Company has supplied the single product that is microscope in different segments for sale.
  • Market specialization: In this alternative, the company selects only one market segment and deals with different types of products by specializing in them. While adopting such strategy, goodwill of the company can be increased but the market cannot be expanded depending on only one market segment.

Market specialization

The above example has adopted market specialization strategy because XYZ company has supplied different types of goods to only one market segment that is B, or only those products which are used in hotels according to the nature of products.

  • Full market coverage: Under the full market coverage, one company selects all the market segments as far as possible and deals with all the products under one line. For example: Nepal Bottlers Company has been selling its products in all markets segments. Similarly, IBM has adopted the strategy of full market coverage.


3. Ethical Considerations


While selecting a best market segment, the interest of the society and customers also should be considered. No any harm should be made to society, customers and nation. So, a company should not consider profit only, it should be careful about ethical aspects also. Social responsibility should be given priority and social audit should be done.

4. Inter-segment Relationship


While selecting market segment, inter-segment relationship should be maintained in performance and technical aspects through this relationship cost can be minimized by using same technology, same production process and same distribution channel.


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