This strategy would avoid direct competition with larger firms who are pursuing bigger segments.
This strategy is also known as ‘concentrated strategy’.
Separating a market into 100% homogeneous segments is really difficult.
Many differences will always remain due to demographics or usage behaviour.
In the case of Mercedes, for a very long time it used a small segment strategy to focus on luxury car market.
However, due to competitive pressures and attractiveness of adjacent segments, it is following a dual-segment strategy.
This strategy is known as multi-segmentation strategy.
All of them would require separate marketing mixes.
It means to concentrate organisation’s marketing efforts on a single segment.
Unfortunately there are large risks associated with this strategy.