Effective market segmentation helps an organization identify groups of consumers it can serve with relevant marketing. But a group is not automatically a useful segment just because its members share a characteristic. The segment must also be practical to reach and serve. This lesson introduces the five criteria summarized by the acronym ADAMS.
The acronym ADAMS stands for Accessible, Differentiable, Actionable, Measurable, and Substantial. Together, these criteria provide a checklist for evaluating whether a market segment can support effective marketing decisions.
All flashcards
What does ADAMS stand for?
Accessible, Differentiable, Actionable, Measurable, and Substantial—the five criteria for evaluating market segments.
What makes a market segment accessible?
An organization can reach its consumers affordably using channels and resources it can support.
What are internal homogeneity and external heterogeneity?
Internal homogeneity means members of a segment share relevant characteristics; external heterogeneity means the segment differs meaningfully from other segments.
How do actionability and measurability differ?
Actionability concerns implementing a suitable strategy and assessing its outcomes; measurability concerns estimating a segment’s size.
What makes a segment substantial?
It is large or valuable enough to justify the resources required to serve it.
Quiz questions
A company finds a large market segment, but it cannot reach the consumers affordably. What should it conclude?Answer: The segment’s size does not make up for its serious accessibility problem.
Research identifies a segment that responds to social media advertising, but the organization lacks the budget and expertise to use that channel. Which issue is most direct?Answer: Accessibility, because the organization cannot use the channel affordably and effectively.
Two proposed segments respond in the same way to the same marketing program. What is the main implication?Answer: Separating them may provide little value because they are not meaningfully differentiated.
A company identifies consumers who prefer a particular product feature but cannot develop or deliver an offer that meets that preference. Which criterion is the clearest concern?Answer: Actionability, because the organization cannot implement a suitable strategy.
A segment is reachable and distinct, but its expected value does not justify the resources needed to serve it. Which criterion is most directly unmet?Answer: Substantiality, because the segment does not justify the required resources.
Based on Principles of Marketing by Dr. Maria Gomez Albrecht, Dr. Mark Green, Linda Hoffman (OpenStax), licensed CC BY 4.0. Adapted into a summary, flashcards and quizzes.