Q: Define market segmentation. What are the steps for target marketing?
Market segmentation: Market segmentation is the act of identifying & profiling distinct
groups of buyers who might require separate products and/or marketing mixes.
Steps for target marketing:
(To select one/two segments to enter)
(To establish & communicate the products)
Describe the market segmentation procedure.
Market segmentation procedure consists of three steps-
1. Survey stage
2. Analysis stage
3. Profiling stage
In survey stage, the researcher conducts exploratory interviews & focus group to gain insight into customer motivation, attitude, and behavior.
In analysis stage, the data obtained from survey stage are analyzed.
Then each cluster is now profiled in terms of its distinguishing attitudes, behavior, and demography.
Q: What are the requirements for effective segmentation?
Requirements for effective segmentation:
Measurable: The size purchasing power & profile of the segments can be measured.
Substantial: The segment should be the largest possible homogenous group.
Accessible: The segments can be affectively reached & served.
Differentiable: The segments are conceptually distinguishable & respond differently to
different marketing mix elements & programs.
Actionable: Effective programs can be formulated for attracting & serving the segments.
Q: How can you evaluate market segments?
There are three factors to be considered for evaluating market segments.
i) Segment size & growth
ii) Segments structural attractiveness &
iii) Company objective & resources