A segmentation-based strategy costs more than a general mass marketing approach. Differentiation implies more promotional campaigns, new offerings and other efforts, which increase the cost of production. However, differentiation lowers cost by targeting your market, it increases your marketing performance and limits the amount of waste. Segmentation, unlike mass marketing requires major corporate commitment. A company may need to hire consultants, allow a larger time commitment, and most importantly follow the recommendations of the consultants.
Segmentation is limited by the ability to implement strategies based on research.
Segmentation research is useless unless constant product, pricing, promotional, and distribution strategies are regularly changed to adapt to the ever-changing demands of the customers who support it. Be aware that market segmentation strategies are not the cure-all for other potential shortcomings of a company. Now that you know what market segmentation is, who should use it, why a business should use it, and the advantages and disadvantages of using it, you need to know how a company should go about segmenting the market. Art Weinstein in his book Market Segmentation discussed the importance of planning and research for segmentation. He also laid out ten different points that were to be followed by companies.