The process of market segmentation is explained below:
1. Identify Segmented Market:
This is the first step in market segmentation. It involves identification of buyers with various or differing needs and preferences and grouping them through market research. This process involves determining who the actual and potential customers are. The marketer does not create the segment but to identify it.
2. Analyze each Segment:
The second step of market segmentation process is to analyze each segment. After identifying potential market segments, it is important to research and analyze the consumers that comprise each segment. In addition, it’s important to determine the similarities that connect the members of each segment, and identify the differences that separate one from another.
3. Evaluate Market Opportunities:
The third step of the process is to evaluate your market opportunities. The customer profiles you create help you identify the market segments that offer the sufficient benefits you need to achieve company goals and objectives. When evaluating each segment, you should consider your ability to reach the targeted consumer, the number of potential customers within the segment, your ability to measure the segments process and the segments compatibility with your company’s mission.
4. Select Target Segments:
The fourth and final step of market segmentation process is to select the appropriate target segments. Once you select one or more target segments you can develop products and marketing strategies to satisfy your customer needs.