Market segmentation is a means to an end: to identify and profile distinct groups of buyers who differ in their needs, preferences, and responsiveness to an organization’s marketing programs. Effective market segmentation should provide answers to six fundamental buyer-related questions for each market segment:
- Who are they?
- What do they want to buy?
- How do they want to buy?
- When do they want to buy?
- Where do they want to buy?
- Why do they want to buy?
More often than not, the answers should be expressed in a narrative form documented with quantitative and qualitative research.
From a managerial perspective, effective market segmentation means that each segment identified and profiled satisfies four fundamental requirements. Each market segment should be:
- Measureable. The size and buying power of market segmentation can be quantitatively determined.
- Differentiable. A market segment is distinguishable from other segments and responds differently to different marketing programs.
- Accessible. A segment can be effectively reached and served through an economically viable marketing program.
- Substantial. A segment should be large enough in terms of sales volume potential to cover the cost of the organization serving it and return a satisfactory profit.
My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.
