Name and explain two (2) prerequisites for market segmentation
1. Understanding the target market: Before segmenting the market, it is essential to have a clear understanding of the target market. This includes demographic information such as age, gender, income level, and geographic location, as well as psychographic information such as values, interests, and lifestyles. By understanding the target market, businesses can identify different segments within the market and tailor their marketing strategies to effectively reach each segment.
2. Collecting data: In order to segment the market effectively, businesses need to collect data on their target market. This can be done through surveys, focus groups, and analyzing sales data. By collecting data, businesses can identify common characteristics and preferences among different segments of the market, allowing them to create targeted marketing campaigns that resonate with each segment. Data collection is crucial for market segmentation as it provides the necessary information for businesses to divide the market into distinct segments and develop strategies to meet the needs and preferences of each segment.