Market segmentation has two processing steps, first step would be identifying the general product-markets and the second step is segmenting these general product markets in order to select target markets and developing appropriate marketing blends (the convenient changeable that a company gather together to satisfy the target market).Marketers should break apart all (disaggregate) potential needs into some common markets and general product markets in that the firm will be able to operate profitably.
Disaggregating indicates brainstorming about very different clarifications to various generic needs and choosing some general areas and product markets where the firm is experienced and has enough resource to success. Disaggregating may help companies find a breakthrough opportunity and to have advantages over competitors.
People that have marketing background consider segmenting as an aggregating process that is gathering people with similar needs into a “marketing segment”. A marketing segment is comparatively harmonized collection of customers who will react to marketing blend in similar way.
Ideal market segments must follow these standards;
1. Consistent inside-the clients in market segment shall be similar as possible in order to get the same reaction towards to marketing blend.
2. Different in between-the clients in different segments shall be as different as possible.
3. Segments must have significant size in order to have enough profit.
4. Measurement of segments must be as clear as possible in order to operate the marketing blends.
A Very Best Practice Approach to Segmenting Product Markets
Almost all of the marketing managers have the idea of using market segmentation to narrow down from a general set of opportunities to a precise target market and marketing approach. Also there are thousands of books and articles such as the one you are reading. But still many managers are not able to do well with market segmentation because they are often not sure where to begin and process and put the ideas together.
If managers follow these steps, they will gain sophisticated skills in order to find specific market segment
1. Name the general product market
The company must decide what general market that they want to be in.
2. Cluster potential clients’ needs
The company must find relative needs of potential clients in the market.
3. After identifying the needs of the potential clients, under the lights of this information the company must narrow their general product market down.
4. Size; the company must decide dimensions of the potentially exploitable markets.
5. Name the product markets such as baby boomers.
6. Assess why product-market segments act as they do
7. Calculate approximately the size of the product-market segments in order to reach the profitable segment.
