ADAMS Criteria

Definition

The ADAMS criteria is a set of guidelines used to evaluate the effectiveness of market segmentation. It stands for Actionable, Measurable, Accessible, Differentiable, and Substantial, and is an essential tool in identifying the most valuable target markets for a business.

5 Must Know Facts For Your Next Test

1. The ADAMS criteria helps ensure that market segments are well-defined, accessible, and worth pursuing for a business.
2. Actionable segments can be effectively reached and served through the company's marketing mix and distribution channels.
3. Measurable segments have identifiable size, purchasing power, and profiles that can be quantified.
4. Accessible segments can be efficiently reached and served by the company's marketing efforts.
5. Differentiable segments exhibit distinct needs, behaviors, or responses to marketing efforts that set them apart.

Review Questions

• Explain how the ADAMS criteria helps a business identify the most valuable target markets.
  • The ADAMS criteria provides a framework for evaluating potential market segments to ensure they are worth pursuing. By assessing if segments are Actionable, Measurable, Accessible, Differentiable, and Substantial, a business can focus its resources on the most attractive and viable target markets. This helps the company develop tailored marketing strategies and effectively allocate its budget to reach and serve the most profitable customer groups.
• Describe how the Actionable and Accessible components of the ADAMS criteria are related.
  • The Actionable and Accessible components of the ADAMS criteria are closely linked. For a market segment to be considered actionable, the business must be able to effectively reach and serve that segment through its marketing mix and distribution channels. This requires the segment to be accessible, meaning the company can efficiently communicate with and deliver products/services to those customers. If a segment is not accessible, it cannot be considered truly actionable, as the business would lack the means to successfully target and engage that group of consumers.
• Analyze how the Differentiable aspect of the ADAMS criteria supports a company's competitive positioning.
  • The Differentiable component of the ADAMS criteria is crucial for a company to establish a unique and defensible competitive position in the market. If a target segment does not exhibit distinct needs, behaviors, or responses to marketing efforts that set it apart from other segments, the business will struggle to differentiate its offerings and justify a premium price. By identifying segments that are Differentiable, the company can develop specialized products, services, and marketing strategies tailored to those customers' unique preferences. This allows the business to stand out from competitors and create lasting value for the target market.

Related terms

Market Segmentation: The process of dividing a broad consumer or business market into subsets of consumers who have common needs and applying strategies to best serve these subsets.

Target Market: The specific group of consumers at which a company's marketing efforts and products/services are aimed.

Demographic Segmentation: The division of a market into groups based on variables such as age, gender, income, education, occupation, and family status.