To develop a successful marketing strategy, it is important to identify the appropriate consumer segments. There are four steps you should perform to conduct the market segmentation process effectively.
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Step 1: Identify segmented markets
The first step of the market segmentation process is to identify the segmented markets. It is important to select the segmenting strategy that most accurately categorizes consumers according to your product or service. For example, suppose that your company manufactures infant safety seats. The decision to use the age-oriented strategy to segment the market may not be effective because people become parents at different ages. Promotions and advertising directed toward twenty-something parents may not appeal to older couples with children.
Step 2: Analyze each segment
Step two of the market segmentation process is to analyze each segment. After identifying potential market segments, it is important to research and analyze the consumers that comprise each segment. You must determine the similarities that connect the members of each segment, and identify the differences that separate one segment from another. During the analyzing step, you should outline the buying habits, product usage rates, attitudes, and lifestyle choices that represent a typical customer in each segment. Demographic and geographic information will provide a clear customer profile to help you determine the market segment best suited for your product or service.
Step 3: Evaluate market opportunities
The third step of the process is to evaluate your market opportunities. The customer profiles you create help you identify the market segments that offer the sufficient benefits you need to achieve company goals and objectives. When evaluating each segment, you should consider your ability to reach the targeted consumer, the number of potential customers within the segment, your ability to measure the segment’s progress, and the segment’s compatibility with your company’s mission. During this step, you must also forecast your company’s market share possibility in each segment. By defining the sales potential, you can justify the need to secure the necessary resources to implement your marketing strategy.
Step 4: Select target segments
The fourth step of the market segmentation process is to selectthe appropriate target segments. The research, examination, and evaluation of the market segments allow you to evaluate the profit potential of each segment. Once you select one or more target segments, you can develop products and marketing strategies to satisfy your customers’ needs.
Page 2 Market Segmentation Essay
Example of the market segmentation createdby Hindustan Unilever Limited (HUL) and Indian tobacco Company (ITC): HUL divide the customers into three types of the customers Striving, Aspiring and Affluent and make targeting strategies accordingly: A) Personal Care:
HUL targets different types of customers with different set of bath products.
For Striving customers it offers–> Lifebuoy and Breeze, For Aspiring it offers –> Hammam and basic Lux variants and For Affluent customers–>Pears, Dove and superior range of Lux.
ITC has different targeting strategies for each of its brands. They are based on 6 mantras. For Example : Strategy for Fiama di Wills. Segmentation: It tends to target at the young, urban, aspirational women. Its core target group is the upper and mid-segment urban consumers. Group synergy: Besides, being retailed at departmental stores, it is also present at Wills Lifestyle stores, & ITC hotels Communication strategy: Mostly in the language of the young urban woman professionals—English.
Its aspirational in nature Brand extensions: It has been cleverly leveraged in the shampoos, shower gels, soap and conditioner categories Brand ambassadors: Sophisticated, young, having arrived & beautiful Deepika Padukone is used to further the brand recall Packing: Premium packaging to compete with the likes of Dove. Designed with help from American packaging experts.See More on Marketing