Steps In Segmenting A Market

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In segmenting a market, the following steps should be followed.

Select a market or Product category for study:

The first step in market segmentation process entails defining the overall market or product category to be studied. This gives the marketer bearing and focus concerning what to do. Such a selection can be done on an existing market or product category, a new but related market or product category or totally new market or
product category.

Choose a basis for Segmentation:

After a market or product category, a marketer now chooses a basis for segmentation bases exist as explained earlier. While there are no scientific procedures for selecting segmentation variables, the four basic criteria for segmentation must be given adequate consideration.

Select Segmentation descriptors:

Descriptors identify the specific segmentation variables to use. For example demographic segmentation involves the use of age, occupation, income or any other as a descriptor.

Profile and Analysis Markets:

The profile of market segments includes the size, expected growth, purchase frequency, current brand loyalty and overall long term sales and profit potentials. An analysis of these allows the firm to rank-order potential market segments by profit opportunity, risk, consistency with organization mission and objectives and other factors that may be important to the firm.

Select Target Market:

Target market selection follows naturally the segmentation process. It can be achieved through different strategies, which include differentiated, undifferentiated and concentrated strategies. A Target market by meaning is a group of people and/or organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

Design, Implement and Maintain appropriate Marketing Mixes:

After selecting the target market(s), an appropriate marketing mix(es) is(are) then developed to bring about mutually satisfying exchange relationship with target markets.

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