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Lean Six Sigma Meets Darwin And Market Segmentation

Jan 9, 2008
In today's competitive environment, market segmentation is the latest buzzword and is being touted as the next big thing in corporate management, especially marketing and sales. Lean Six Sigma would have failed just like any other quality improvement methodology, but it survived the test of time because it was quick to adapt to the challenges of market segmentation.

Scope And Importance Of Market Segmentation

Market segmentation is basically a management concept that is utilized by businesses to classify potential customers into different categories based on their age, income, specific needs and other factors. The need for market segmentation was realized when businesses understood that not all their customers were satisfied with the products or services being offered. The feedback provided by customers went a long way in making businesses understand that every individual has his own specific needs and requirements; and as such, the same product or service will not be able to satisfy all customers' needs and requirements.

However, since it is quite impossible to cater to the specific needs and requirements of each and every individual, businesses decided to take the middle path, (i.e. classify potential customers into different categories), each category representing the common needs and requirements of a certain group of individuals or customers. The aim was to design and develop specific products or services for each of these categories or market segments so as to satisfy the common needs and requirements of categorized group members.

It's not surprising then, that businesses have extended their product lines; for example, automobile companies now offer everything from economy cars to luxury sedans and tour operators offer everything from low-cost weekend destinations to luxury cruises across the Atlantic.

How Lean Six Sigma Helps In Market Segmentation

Market segmentation is certainly beneficial, but the problem is that it often requires businesses to incur additional expenses on designing and developing specific products, making the same available to the target audience, and also on marketing and sales. Lean Six Sigma helps because it allows businesses to increase efficiency even at a time when many different processes are being carried out, all at the same time. By utilizing Lean Six Sigma tools and techniques such as JIT (Just In Time) and ROQ (re-order quantity), businesses can ensure that production is not effected and that costs are reduced substantially.

Increased efficiency and reduced costs compensate for the expenses that are incurred for catering to the specific needs and requirements of different market segments. This shows that without Lean Six Sigma, it would become quite difficult to derive all the potential benefits that are associated with market segmentation.

The benefits of Lean Six Sigma were being debated some time back, but its recent success with market segmentation has finally proved that when it comes to managing quality and efficiency, Lean Six Sigma is certainly the best.
About the Author
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.
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