Page 124 - The Handbook for Quality Management a Complete Guide to Operational Excellence

110 I n t e g r a t e d P l a n n i n g U n d e r s t a n d i n g C u s t o m e r E x p e c t a t i o n s a n d N e e d s 111

A. No market segmentation B. Complete market segmentation

C. Segmented by income D. Segmented by age E. Segmented by
classes 1, 2, and 3 classes A and B income age class

B 1A 2B
1 1A
1 3 B
3 B 1B
1 A A 3A 3B
2
A

Figure 6.2 Segmentation concepts.

• Complete market segmentation (B). Each customer is viewed as
possessing a unique set of requirements. Customized marketing is
used. Quality requirements are set by each customer’s individual
demands.
• Segmentation by a single criterion (C, D). A single differentiating factor
(e.g., income or age) is used. A different marketing approach is used
for each level of the differentiating factor. Quality requirements vary
for each level of the differentiating factor.
• Segmentation by multiple criteria (E). Two or more differentiating
factors are used. For example, customers might be classified by both
income and age. Again, marketing strategy and quality requirements
may vary for each segment.
If a segment is small relative to the entire market, and if the competition
in the segment involves few or no competitors, it is said to be a market
“niche.” Market niches are often deliberately selected for special products
or services for which the company possesses a competitive advantage.
While it may be simple to conceptualize quality requirements that
vary by customer segment, implementing these different requirements in
a single company is problematic. Generally, firms have only one quality
policy, and requirements tend to flow from the policy. Also, customers

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