Process of Market Segmentation
Meaningful market segmentation involves certain steps. A market segmentation process to be effective should not be based on any assumptions rather it should be based on detailed study and accurate facts.
You may be wondering, how to make a market segmentation strategy? The process of market segmentation is also known as the steps involved in building a meaningful market segmentation strategy. The necessary steps for the market segmentation process are as follows:
Identify the Market Segments
The process of market segmentation begins with the identification of the market segments. A marketer should know to whom he is going to sell his offerings. On the first side, he may not be able to identify the particular segments he has to go through a particular way, he himself be capable to enter such segments.
He may make his market identification effective and meaningful by focusing on such factors as consumer’s taste, need, preferences, age group, consumer size, sex group, product characteristics. Let’s suppose you have a fast-food restaurant, to whom will you target? Maybe teenagers or young people or adults.
Develop the Profiles for Each Segment
After successfully identification of market segments, a marketer should analyze each segment to determine their characteristics, similarities, and dissimilarities. Each segment has distinct characteristics which a marketer needs to understand.
For each segment, a separate profile needs to develop. And, different marketing strategy is also required for each market segment. E.g. you may develop profiles for girls, boys, kids, adults, etc.
Evaluate of Market Segments
In this stage of the market segmentation process, the market should evaluate all the market segments to find out their value for marketing operations. A marketer may consider the following aspects while evaluating market segments,
- Reachability to such market segment.
- Cost to enter on such segment.
- The demand for products and services.
- The competitive position of the firm in each segment.
- Segment size and potneital profit size.
- Potential firm’s goals and objectives in the target market.
In addition, the marketer also has to gauge whether the marketing program needed to reach a segment will create customer product and brand attitude consistent with corporate objectives. And, finally, all the possible opportunities from all segments should be listed properly. E.g. here you may evaluate either girls, boys, kids, or adults who prefer more fast foods.
Select Target Market (Best Market Segment)
After the proper evaluation of each market segment, a marketer finally selects the best market segment. The best market segment is one that holds greater opportunities for the firm. Here, the opportunities are concerned with the profits, business firm’s image, meeting firm’s goals & objectives, strengthening firms competitive position in the market, enhancing firm’s sustainability, etc. The selected segment is referred to as the target market.
If a business firm feels that it can enter into more than one market segment because of adequate opportunities, it selects more than one segment. However, the marker needs to adopt a separate marketing program for each of the target markets.
E.g. here you may target teenagers rather targeting adults. As more teenagers prefer to have fast foods where adults are savvier.
Develop a Positioning Strategy
After the selection of a target market, the marketer needs to develop a product positioning strategy. Product positioning involves setting the strategies for how the product sits in the mind of target market consumers.
The marketer needs to identify the attributes and images of each competitor’s products and choose a position of its product for making the target market more accessible. Because immediately after selecting a target market, the marketer can not reach quickly to the market as the product may be quite new for the market or the market may be quite new to the firm. For reaching the target market, the marketer must develop a positioning strategy that can best appeal to its potential customers within the descriptive or functional discipline.
Focusing On Marketing Program
The last stage of the market segmentation process is doing marketing programs. As the ultimate goal of market segmentation is to understand the target market and apply accordingly marketing strategy to make them satisfied and achieve businesses objectives.
To make an effective marketing plan and program the marketer can use various components of the marketing mix to communicate with the target market easily. And, finally, he may implement his positioning strategy to achieve organizational objectives. In addition, he also needs to review the performance of the marketing plan and positioning strategy, either it is going as planning or not.