Identifying Market Segments And Targets

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Market for product is big and diverse making it difficult for companies to be able to satisfy every customer. Companies need to identify a certain set of customer within a market and work towards satisfying them. This set of identification is market segment. Companies further need to understand the intricacy of how this segment behaves and operates. An approach known as target marketing is gaining prominence where companies identify the market segment on similar needs and wants, select one of the market segments and then focus in developing products and marketing program.

Earlier business operation was in the form of mass marketing. In mass marketing companies produce a product in large quantities and serve this product to as many consumers as possible. This made sense as markets were developing and not much variety was on offering. Now product offerings have under gone radical change thanks to advertising and communication reach. Therefore, companies look forward to marketing at segment, niches, local and individual level.

The market segmentation task has to follow a scientific process.

• The first task is to group customer according to product and service they want.
• The second task is to analyze customer by summarizing demographic, lifestyle and usage pattern, which helps in the definition of market segment.
• The third task is due diligence of the market for growth potential, competition and other factors.
• The fourth task is to profitability of market segment.
• The fifth task is to undertake positioning activity for pricing and marketing programs.
• The sixth task is to explore different positioning and marketing strategies to explore the market to its full potential.