National Textile University

BSc. Textile Engineering

FM-(Weaving)

Assignment # 03
MG-4083: Management Science-II
Semester: 8th
Title: What are the basic steps to segmentize the
market?
Submitted By:
Muhammad Nadeem
(12-NTU-0074)
Submitted To:
Sir Mr. Zahid
Submission Date:
20-04-2016
What are the basic steps to segmentize the market?

Marketing is typically aimed at a particular part or segment within a market or region. These
segments can be categorized by any criteria you wish and are often measured and divided
differently from one company to the next. Some factors include income, education, and age,
but there are endless other possibilities. Business owners can take specific steps in their plans
to develop a market segment in which to sell products or services. The basic steps involve to
segmentize the market are:
1. Defining the Market
In the first step in this more detailed model is to clearly define the market that the firm is
interested in. This may sound relatively straightforward but it is an important consideration.
For example, when Coca-Cola looks at market segmentation they would be unlikely to look
at the beverage market overall. Instead they would look at what is known as a sub-market (a
more product-market definition). A possible market definition that Coca-Cola could use
might be diet cola soft drinks in South America. It is this more precise market definition that
is segmented, not the overall beverage market, as it is far too generic and has too many
diverse market segments.
2. Creating Market Segments
Once the market has been defined, the next step is to segment the market, using a variety of
different segmentation bases / variables in order to construct groups of consumer. In other
words, allocate the consumers in the defined market to similar groups (based on market
needs, behavior or other characteristics).
3. Evaluating the Segments for Sustainability
After market segments have been developed they are then evaluated using a set criteria to
ensure that they are useable and logical. This requires the segments to be assessed against a
checklist of factors, such as: are the segments reachable, do they have different groups of
needs, are they large enough, and so on.
4. Constructing Segment Profiles
Once viable market segments have been determined, segment profiles are then developed.
Segment profiles are detailed descriptions of the consumers in the segments describing their
needs, behaviors, preferences, demographics, shopping styles, and so on. Often a segment is
given a descriptive nickname by the organization. This is much in the same way that the age
cohorts of Baby Boomers, Generation X and Generation Y have a name.
5. Evaluating the Attractiveness of Each Segment
Available market data and consumer research findings are then are added to the description of
the segments (the profiles), such as segment size, growth rates, price sensitivity, brand
loyalty, and so on. Using this combined information, the firm will then evaluate each market
segment on its overall attractiveness. Some form of scoring model will probably be used for
this task, resulting in numerical and qualitative scores for each market segment.
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6. Selecting Target Markets

With detailed information on each of the segments now available, the firm then decides
which ones are the most appropriate ones to be selected as target markets. There are many
factors to consider when choosing a target market. These factors include: firms strategy, the
attractiveness of the segment, the competitive rivalry of the segment, the firms ability to
successfully compete and so on.
7. Developing Positioning Strategy
The next step is to work out how to best compete in the selected target market. Firms need to
identify how to position their products/brands in the target market. As it is likely that there
are already competitive offerings in the market, the firm needs to work out how they can win
market share from established players. Typically this is achieved by being perceived by
consumers as being different, unique, superior, or as providing greater value.
8. Developing and Implementing the Marketing Mix
Once a positioning strategy has been developed, the firm moves to implementation. This is
the development of a marketing mix that will support the positioning in the marketplace. This
requires suitable products need to be designed and developed, at a suitable price, with
suitable distribution channels, and an effective promotional program.
9. Performance Review
After a period of time, and on a regular basis, the firm needs to revisit the performance of
various products and may review their segmentation process in order to reassess their view of
the market and to look for new opportunities.