is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.
The process you are referring to is known as market segmentation. It involves dividing a broad product-market into smaller, more manageable segments based on various criteria. These segments are then prioritized as target markets, and specific marketing strategies are developed to cater to each segment's needs.
To perform market segmentation, follow these steps:
1. Identify the broad product-market: Determine the overall market that your product or service operates in. For example, if you sell personal computers, your broad product-market would be the consumer electronics market.
2. Naming broad product-markets: Give a clear and concise name to describe the major product-markets within the broad market. For example, within the consumer electronics market, you might have categories like smartphones, tablets, laptops, wearables, etc.
3. Segmenting the broad product-markets: Divide each named broad product-market into smaller segments based on characteristics such as demographics (age, gender, income), geographic location, psychographics (lifestyle, values), behavior (usage patterns, loyalty), or firmographics (company size, industry type) for business-to-business markets.
4. Selecting target markets: Evaluate the potential of each segment and prioritize them based on factors like size, growth potential, profitability, competition, and compatibility with your product or brand. Determine which segments are worth targeting.
5. Developing marketing mixes: Once the target segments are identified, tailor marketing strategies and tactics for each segment. This includes product design, pricing, distribution channels, promotional activities, and messaging that matches the needs and preferences of each target market.
It's important to note that market segmentation is an iterative process. As market conditions change and new opportunities arise, you may need to revisit and adjust your segmentation and targeting strategies.
Remember, market segmentation helps you focus your marketing efforts more effectively by understanding and meeting the specific needs of different customer groups.