It may happen many times in your evolution as a small business owner. You confide in someone about a situation unfolding at your business and he or she renders a swift and confident verdict. In this case: “It sounds like your company is a prime candidate for multi-segment marketing.” You nod in approval, not daring to admit that you're actually racking your brain, trying to remember how your college professors explained this marketing strategy. Once you dust off the textbooks, you can take the time to assess that verdict, as you revisit what multi-segment marketing is, when the strategy works best, which companies practice the strategy and its respective pros and cons.

Define It

A company engages in multi-segment marketing when it “advertises with different hooks, trying to get customers from different markets to buy the same product for the same uses,” The Law Dictionary says. The strategy is also known as “differentiated marketing.”

Work It

As a small business owner, you know that advertising to one audience can be expensive. So if you assume that multi-segment marketing can be even more expensive, you're correct. This is partly why a market worth segmenting should meet certain conditions: to ensure that the strategy has a chance of delivering a strong return on your investment.

A market might be worth segmenting if it is:

  • Big enough to be profitable Growing – or at least exhibits promise of future growth Enjoying market supremacy while burnishing a niche that is different from the competition* Reachable through your company's existing distribution and promotion channels
  • Affordable to reach
  • Responsive to marketing messages* Reflective of your company's goals and objectives

Visualize It

You probably know of companies that employ multi-segment marketing. But up until now, you may not have known the strategy by its name. These examples may help crystallize the association:

  • Kellogg's made a bold pitch to appeal to both its target groups (children and adults) by featuring a close-up shot of a bowl of its Crunchy Nut cereal next to an offer of free bowling.* Marriott International breaks down its huge market of travelers into highly segmented groups that frequent its Ritz-Carlton hotels (serving luxury travelers); Fairfield Inn (appealing to budget travelers); Courtyard by Marriott (catering to business travelers); and Marriott Vacation Clubs (targeting travelers who also seek to purchase time-share properties).
  • Disney has perfected the art of making each of its primary market segments – children, teens and adults – believe that it exists purely for their entertainment value. Disney's animation films and spin-off toys are targeted to children while the Disney Channel, Radio Disney and live-action films “speak” to pre-teens and teens. Adults are known to respond well to the adult humor laced throughout Disney's animation films. But they may be surprised to know that the Disney Store is set up to lure them, too, primarily through its home section.

Assess It

There are pros and cons to multi-segment marketing. When it's well executed, it can:

  • Help a company better understand and respond to the needs and wants of a particular market
  • Reduce a company's dependency on only one market (particularly beneficial if the market is prone to fluctuations in demand)
  • Create a competitive advantage

Multi-segment marketing also carries risks, especially that of:

  • Diluting and devaluing a brand and its image
  • Creating confusion in the minds of consumers who strongly identify with one segment but not another
  • Straining a company's resources