The process of naming broad product-markets and then segmenting them in order to select target markets and develop suitable marketing mixes is called:
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 or criteria. This enables companies to identify specific target markets and tailor their marketing strategies and offerings to better meet the needs and preferences of those individual segments.
To arrive at market segments, companies typically follow these steps:
1. Naming broad product-markets: This entails identifying the overall market in which a company operates, such as the automotive industry, healthcare sector, or consumer electronics market.
2. Segmenting the market: Once the broad product-market is defined, companies then analyze various factors to segment the market. These factors can include demographic (age, gender, income), geographic (location), psychographic (lifestyle, values), and behavioral (buying habits, product usage) attributes.
3. Selecting target markets: After segmenting the market, companies evaluate the segments and select the ones that align with their business objectives and have the greatest potential for profitability. This involves considering factors such as segment size, growth prospects, competition, and company resources.
4. Developing suitable marketing mixes: Once target markets are identified, companies develop marketing mixes tailored to each segment. This includes creating unique product offerings, setting appropriate prices, determining the most effective distribution channels, and developing targeted promotional strategies.
By following these steps, companies can effectively understand their customers, tailor their marketing efforts, and achieve better business results.