Market Segmentation is the basis for Market Targeting and Positioning (STP). Marketing Managers enjoy leading the discussions and helping the rest of the team through the segmentation process. Here are the steps for market segmentation.
– Name the market.
– Identify market needs. (Review research findings and SWOT Analysis)
– List the qualifying dimensions. (Six to ten should be sufficient. Refer to Table 8.1 on page 214.)
– Identify market segments. (Use descriptive names. Do not use current product names.)
– Describe market segments using determining dimensions.
– Create a meaningful graphic representation of the market segmentation.
Be open to iterations and changes. There is not a right or wrong. Progress is made when the segments identified and described are measurable, substantial, accessible, differentiable, and actionable.