Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful by Leisch, Friedrich

Part I
Introduction

Chapter 1
Market Segmentation
1.1 Strategic and Tactical Marketing
The purpose of marketing is to match the genuine needs and desires of consumers
with the offers of suppliers particularly suited to satisfy those needs and desires. This
matching process benefits consumers and suppliers, and drives an organisation’s
marketing planning process.
Marketing planning is a logical sequence and a series of activities leading
to the setting of marketing objectives and the formulation of plans to achieving
them (McDonald and Wilson 2011, p. 24). A marketing plan consists of two
components: a strategic and a tactical marketing plan. The strategic plan outlines the
long-term direction of an organisation, but does not provide much detail on short-

term marketing action required to move in this long-term direction. The tactical
marketing plan does the opposite. It translates the long-term strategic plan into
detailed instructions for short-term marketing action. The strategic marketing plan
states where the organisation wants to go and why. The tactical marketing plan
contains instructions on what needs to be done to get there.
This process is much like going on a hiking expedition (Fig. 1.1). Before starting
a hike, it is critically important to organise a map, and figure out where exactly
one’s present location is. Once the present location is known, the next step is to
decide which mountain to climb. The choice of the mountain is a strategic decision;
it determines all subsequent decisions. As soon as this strategic decision is made,
the expedition team can move on to tactical decisions, such as: which shoes to wear
for this particular hike, which time of day to depart, and how much food and drink
to pack. All these tactical decisions are important to ensure a safe expedition, but
they depend entirely on the strategic decision of which mountain to climb.
Preparations for the mountain climbing expedition are similar to the development
of an organisational marketing plan. The strategic marketing plan typically identifies
consumer needs and desires, strengths and weaknesses internal to the organisation,
and external opportunities and threats the organisation may face. A SWOT analysis

Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful by Leisch, Friedrich