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Problem

Explain how a change in segmentation policy (that is, entering new markets) may trigger the need for drastic changes in the industrial channel of distribution.

Step-by-step solution

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Step 1/2

Segmentation policy is a marketing strategy in which wide target market is subdivided into different segments like customers, businesses, geographical area, buying behavior, price, etc. Market segmentation help the organizations in competing with its competitors, getting aware about the needs of customers, better utilization of market resources and targeting customers.

Step 2/2

The marketing policy of an organization is completely depends on market segmentation and different market segments require different distribution channels even for the same product. Not only market segments but also distribution channels reflect overall marketing goals of an organization so the management developed different effective distribution channels for different marketing segments to achieve the marketing goal of the organization.

The distribution channels are developed on the basis of different market segments, if there will be any changes in segmentation policy then the distribution channel have to be changed accordingly to achieve marketing goal of the organization.