Steps in Market Segmentation



Segmentation refers to the process of creating small segments within a broad market to select the right target market for various brands. Market segmentation helps the marketers to devise and implement relevant strategies to promote their products amongst the target market.

A market segment consists of individuals who have similar choices, interests and preferences. They generally think on the same lines and are inclined towards similar products. Once the organizations decide on their target market, they can easily formulate strategies and plans to make their brands popular amongst the consumers.

Steps in Market Segmentation

  1. Identify the target market

    The first and foremost step is to identify the target market. The marketers must be very clear about who all should be included in a common segment. Make sure the individuals have something in common. A male and a female can’t be included in one segment as they have different needs and expectations.

    Burberry stocks separate merchandise for both men and women. The management is very clear on the target market and has separate strategies for product promotion amongst both the segments.

    A Garnier men’s deodorant would obviously not sell if the company uses a female model to create awareness.

    Segmentation helps the organizations decide on the marketing strategies and promotional schemes.

    Maruti Suzuki has adopted a focused approach and wisely created segments within a large market to promote their cars.

    Lower Income Group - Maruti 800, Alto
    Middle Income Group - Wagon R, Swift, Swift Dzire, Ritz
    High Income Group - Maruti Suzuki Kizashi, Suzuki Grand Vitara

    Suzuki Grand Vitara would obviously have no takers amongst the lower income group.

    The target market for Rado, Omega or Tag Heuer is the premium segment as compared to Maxima or a Sonata watch.

  2. Identify expectations of Target Audience

    Once the target market is decided, it is essential to find out the needs of the target audience. The product must meet the expectations of the individuals. The marketer must interact with the target audience to know more about their interests and demands.

    Kellogg’s K special was launched specifically for the individuals who wanted to cut down on their calorie intake.

    Marketing professionals or individuals exposed to sun rays for a long duration need something which would protect their skin from the harmful effects of sun rays. Keeping this in mind, many organizations came with the concept of sunscreen lotions and creams with a sun protection factor especially for men.

  3. Create Subgroups

    The organizations should ensure their target market is well defined. Create subgroups within groups for effective results.

    Cosmetics for females now come in various categories.

    • Creams and Lotions for girls between 20-25 years would focus more on fairness.
    • Creams and lotions for girls between 25 to 35 years promise to reduce the signs of ageing.
  4. Review the needs of the target audience

    It is essential for the marketer to review the needs and preferences of individuals belonging to each segment and sub-segment. The consumers of a particular segment must respond to similar fluctuations in the market and similar marketing strategies.

  5. Name your market Segment

    Give an appropriate name to each segment. It makes implementation of strategies easier.

    A kids section can have various segments namely new born, infants, toddlers and so on.

  6. Marketing Strategies

    Devise relevant strategies to promote brands amongst each segment. Remember you can’t afford to have same strategies for all the segments. Make sure there is a connect between the product and the target audience. Advertisements promoting female toiletries can’t afford to have a male model, else the purpose gets nullified.

    A model promoting a sunscreen lotion has to be shown roaming or working in sun for the desired impact.

  7. Review the behavior

    Review the behavior of the target audience frequently. It is not necessary individuals would have the same requirement (demand) all through the year. Demands vary, perceptions change and interests differ. A detailed study of the target audience is essential.

  8. Size of the Target Market

    It is essential to know the target market size. Collect necessary data for the same. It helps in sales planning and forecasting.



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