Marketing Strategy: 7 Steps to Market Segmentation

Market segmentation is widely defined as being a complex process consisting in two main phases:

- identification of broad, large markets


- segmentation of these markets in order to select the most appropriate target markets and develop Marketing mixes accordingly.

Everyone within the Marketing world knows and speaks of segmentation yet not many truly understand its underlying mechanics, thus failure is just around the corner. What causes this? It has been documented that most marketers fail the segmentation exam and start with a narrow mind and a bunch of misconceptions such as "all teenagers are rebels", "all elderly women buy the same cosmetics brands" and so on. There are many dimensions to be considered, and uncovering them is certainly an exercise of creativity.

The most widely employed model of market segmentation comprises 7 steps, each of them designed to encourage the marketer to come with a creative approach.

STEP 1: Identify and name the broad market

You have to have figured out by this moment what broad market your business aims at. If your company is already on a market, this can be a starting point; more options are available for a new business but resources would normally be a little limited.

The biggest challenge is to find the right balance for your business: use your experience, knowledge and common sense to estimate if the market you have just identified earlier is not too narrow or too broad for you.

STEP 2: Identify and make an inventory of potential customers' needs

This step pushes the creativity challenge even farther, since it can be compared to a brainstorming session.

What you have to figure out is what needs the consumers from the broad market identified earlier might have. The more possible needs you can come up with, the better.

Got yourself stuck in this stage of segmentation? Try to put yourself into the shoes of your potential customers: why would they buy your product, what could possibly trigger a buying decision? Answering these questions can help you list most needs of potential customers on a given product market.

STEP 3: Formulate narrower markets

McCarthy and Perreault suggest forming sub-markets around what you would call your "typical customer", then aggregate similar people into this segment, on the condition to be able to satisfy their needs using the same Marketing mix.
Start building a column with dimensions of the major need you try to cover: this will make it easier for you to decide if a given person should be included in the first segment or you should form a new segment. Also create a list of people-related features, demographics included, for each narrow market you form - a further step will ask you to name them.

There is no exact formula on how to form narrow markets: use your best judgement and experience. Do not avoid asking opinions even from non-Marketing professionals, as different people can have different opinions and you can usually count on at least those items most people agree on.

STEP 4: Identify the determining dimensions
Carefully review the list resulted form the previous step. You should have by now a list of need dimensions for each market segment: try to identify those that carry a determining power.

Reviewing the needs and attitudes of those you included within each market segment can help you figure out the determining dimensions.

STEP 5: Name possible segment markets
You have identified the determining dimensions of your market segments, now review them one by one and give them an appropriate name.

A good way of naming these markets is to rely on the most important determining dimension.

STEP 6: Evaluate the behavior of market segments

Once you are done naming each market segment, allow time to consider what other aspects you know about them. It is important for a marketer to understand market behavior and what triggers it. You might notice that, while most segments have similar needs, they're still different needs: understanding the difference and acting upon it is the key to achieve success using competitive offerings.

STEP 7: Estimate the size of each market segment

Each segment identified, named and studied during the previous stages should finally be given an estimate size, even if, for lack of data, it is only a rough estimate.

Estimates of market segments will come in handy later, by offering a support for sales forecasts and help plan the Marketing mix: the more data we can gather at this moment, the easier further planning and strategy will be.

These were the steps to segment a market, briefly presented. If performed correctly and thoroughly, you should now be able to have a glimpse of how to build Marketing mixes for each market segment.

This 7 steps approach to market segmentation is very simple and practical and works for most marketers. However, if you are curious about other methods and want to experiment, you should take a look at computer-aided techniques, such as clustering and positioning.

Marketing Strategy: 7 Steps to Market Segmentation

Otilia Otlacan is a young certified professional with expertise in e-Marketing and e-Business, currently working as independent consultant and e-publisher. She developed and teach her own online course in Principles of e-Marketing and is also a volunteer Economics teacher. Contact Otilia through, her e-Marketing articles and resources portal.

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UOB Bank Singapore - Internet Banking

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Thanks To : Management Concept Style The Global Marketing Advertising Techniques

How to Start Your Own Makeup Line, Even on a Limited Budget

If you want to start your own cosmetic line, first decide on a specific and unique solution that you will provide to your customers. There are so many cosmetic products on store shelves today that unless you have a unique selling proposition, your product will get lost in the market. Understand what your target market wants and provide a product give them what they want.

If you have a product idea in mind, but you are not sure whether customers will buy it, you can do some low-cost market research by checking out online makeup forums like Ultimate Cosmetics or Makeup Talk. Read forum discussion threads, and you will easily find out what the market is concerned about and what they are interested in - simply by what users are saying.

\"market Research\"

More and more people are now looking for makeup with special features like natural or organic ingredients or convenient packaging that basically translate to higher value. You will find it easier to run a profitable business with a high value cosmetic line than makeup products with a low price point that do not offer significant value to the customer. People want value and if cosmetics are priced right, consumers are generally willing to pay more for it.

Developing your own makeup line takes time. Market research, product development, packaging and promotion all need to take place before your product hits the market. You need patience and determination to get through the launch phase of your business. That said, you do not need to spend years developing your product line.

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Packaging is important, as it is what your customer will see first. You also want to have a business name and logo that grabs attention. While you want a name and design that stand out, you also want to make sure that shoppers can easily understand what the product is and the benefits it provides by reading the label.

For home-based entrepreneurs, the internet makes packaging and design much easier. You can find wholesale packaging suppliers online for items like bottles, jars, lip balm tubes and plastic containers. You can also save hundreds of dollars on logo design by creating your own logo at websites like Logo Maker.

You can protect your business name and design with a trademark, Start by doing a search in the US Patent and Trademark database to make sure the name is not already trademarked. Register your business name with your city or county clerk and obtain a business license from your local government office.

How to Start Your Own Makeup Line, Even on a Limited Budget

Home Business Center, Inc lists a variety of do-it-yourself tools and resources that entrepreneurs can use to launch their makeup lines. Find out more >> How to Start a Makeup Line

Thanks To : The Global Marketing Advertising Techniques Management Concept Style