Process of Market Segmentation

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We will discuss the Process of Market Segmentation

According to Philip Kotler (2006). Market segmentation is the act of identifying and profiling distinct groups of buyers who differ in their needs and preferences.

It is a process of identifying and profiling distinct groups of buyers based on requirements.

Process of Market Segmentation

The process of Market Segmentation consists of the following steps:

Market Survey: 

Investigating the market information about the customer nature, attitude, brand, loyalty, price value, perception, wage pattern, and other variables. Studying to market for managing groups based on similar preferences. Knowing about market features and characteristics. Like, customer needs and characteristics, brand awareness by customers, etc

Segments Identification

We should do an evaluation of the data and information after collection. Factors affecting the demand are classified into major and minor factors. Major factors are studied in detail. Quantitative tools and techniques can be use for deciding possible segments. 

Segments Profiling

Detail and micro-level study of all identified segments to know more information. Segmentation variables that can be used in segmentation are analyzed in detail. It also identifies similarities and dissimilarities of segments. Hance, A separate profile of each segment based on common criteria is prepare. They represent micro markets.

Segment Evaluation

Comparing all the identified segments based on common criteria. It manages a way of choosing the best. Segments can be evaluated on the basis of cost, Revenue, Profit, Customer Volume, Growth Ratio, and Technology of the organization. Similarly Budget, Resources, Objectives, Social expectation, competition, ethical consideration, fulfillment of requirements such as measurable, divisible, accessible, substantial, etc. Markets keep on changing. Hence, market segmentation is necessary periodically.

Segment Selection

Deciding the best segment on the basis of evaluation results. Selected segments are called target markets. These are the group of people, whom the company is going to serve.

Hence, we should follow above mention steps to select the best segments.

Other Important Links

Requirement for effective Segmentation: CLICK HERE

Benefits of Market Segmentation: CLICK HERE

Target Market: CLICK HERE