Targeting Multiple Segments and Supersegments
Very often, companies start out by marketing to one segment, then expand to others. For example, Paging Network Inc.—known as PageNet—is a small developer of paging systems, and was the first to offer voice mail on pagers. To compete with Southwestern Bell and other Bell companies, it sets its prices about 20 percent below rivals' prices. Initially, PageNet used geographic segmentation to identify attractive markets in Ohio and Texas where local competitors were vulnerable to its aggressive pricing. Next, the firm developed a profile of users for paging services so it could target salespeople, messengers, and service people. PageNet also used lifestyle segmentation to target additional consumer groups, such as parents who leave their children with a sitter. Finally, PageNet began distributing its pagers through Kmart, Wal-Mart, and Home Depot, offering attractive discounts in return for the right to keep the monthly service charge revenues on any pagers sold.33
In targeting more than one segment, a company should examine segment interrelationships on the cost, performance, and technology side. A company that is carrying fixed costs, such as a sales force or store outlets, can generally add products to absorb and share some of these costs. Smart companies know that economies of scope can be just as important as economies of scale. Moreover, companies should look beyond isolated segments to target a supersegment, a set of segments that share some exploitable similarity. For example, many symphony orchestras target people with broad cultural interests, rather than only those who regularly attend concerts.
Still, a company's invasion plans can be thwarted when it confronts blocked markets. This problem calls for megamarketing, the strategic coordination of economic, psychological, political, and public-relations skills to gain the cooperation of a number of parties in order to enter or operate in a given market. Pepsi used megamarketing to enter India after Coca-Cola left the market. First, it worked with a local business group to gain government approval for its entry over the objections of domestic soft-drink companies and antimultinational legislators. Pepsi also offered to help India export enough agricultural products to more than cover the cost of importing soft-drink concentrate and promised economic development for some rural areas. By winning the support of these and other interest groups, Pepsi was finally able to crack the Indian market.
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