The process of naming broad product-markets and then dividing them in order to select target markets and develop suitable
The process you are referring to is called market segmentation. Market segmentation involves dividing a broad product-market into smaller, more manageable segments based on certain characteristics, in order to select target markets and develop suitable marketing strategies.
To carry out market segmentation, you can follow a step-by-step process:
1. Identify the broad product-market: Start by clearly defining the broad product-market you are operating in. For example, if you are in the food industry, your broad product-market could be "prepared meals".
2. Conduct market research: Gather data and insights about your potential customers and their characteristics. This can include demographic information (age, gender, income level), geographic location, psychographic data (lifestyle, values, attitudes), and behavioral patterns (purchase behavior, product usage).
3. Identify segmentation variables: Determine the criteria that can be used to divide your broad product-market into smaller segments. These variables can be based on the data collected in the previous step. For example, you may choose to segment your market based on age groups, income levels, or geographic regions.
4. Segment the market: Apply the chosen segmentation variables to divide the broad product-market into smaller segments. This process involves grouping similar individuals or organizations together based on their shared characteristics.
5. Evaluate segment attractiveness: Assess the potential of each segment by considering factors such as size, growth rate, competition, and compatibility with your organization's capabilities and objectives. This evaluation will help you prioritize which segments to target.
6. Select target markets: Choose one or more segments that align with your organization's objectives, resources, and competitive advantage. These segments should offer the most growth potential and align with your marketing goals.
7. Develop marketing strategies: Tailor your marketing strategies to effectively reach and engage the selected target markets. This includes designing products, pricing, distribution channels, and promotional activities that best suit the needs and preferences of the target customers in each segment.
Keep in mind that market segmentation is an ongoing process, and the segments may evolve or change over time. Regularly monitor and update your segmentation strategies to stay relevant and responsive to market changes.