Page 51 - EBOOK DPM 10013 POM-FINAL 25.10.2021

Table 4.2:THREE factor of segment evaluation

THREE (3) factors Segment Evaluation

Current  It will be looking for segments with the appropriate size and

Segment Size growth characteristics. For every organisation, the largest,
and Growth fastest-growing segments are not usually the most appealing.

Potential Smaller businesses may lack the necessary skills and resources

to serve larger markets.

 In a strict sense, such organisations may target segments that
are smaller and less appealing, but that are potentially more

profitable for them.

Segment  The organisation must also look into important structural

Attractiveness variables that influence sector appeal in the long run.
 If a market segment already has a lot of strong and fierce

competitors, it will be less appealing.

 Strong competition in a market or market segment may be a

segment to avoid or one in which to use a different strategy.

 Because there are so many actual or possible replacement
products, pricing and earnings in a segment may be limited.

Company  Even if a segment has the correct size and development

Objectives and potential and is fundamentally appealing, the company must
Resources take into account its own goals and resources. Some appealing

categories might be rapidly disregarded if they do not align with

the company's long-term goals.
 Alternatively, the organisation may lack the necessary skills and

resources to operate in a lucrative market.

 In many circumstances, addressing market segments

necessitates significant resources, such as distribution and
market research costs.

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