How to conduct market segmentation and target market selection

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Edited at 2022-10-22 11:28:05

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How to conduct market segmentation and target market selection

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How to conduct market segmentation and target market selection

Market segmentation is the process of dividing a large market into smaller submarkets with similar needs and behavioral characteristics

Market segmentation helps businesses better understand their audience and their needs

By segmenting the market, companies can formulate market strategies and positioning more effectively

A target market is a specific market segment on which a business chooses to focus its resources and efforts

Identifying target markets helps companies better meet the needs of specific groups and provide more targeted products and services

Step 1: Market Research and Data Collection

Conduct market research to gain a comprehensive understanding of current market conditions

Gather information about market size, growth trends, competitors and target audience

Collect data using methods such as questionnaires, focus groups, online and offline surveys

Analyze and interpret collected data to identify potential opportunities for market segmentation

Evaluate various aspects of the market through methods such as statistical data analysis, market research reports, and trend analysis

Identify different market segments and their characteristics, such as age, gender, geography, interests, etc.

Step 2: Determine market segmentation criteria

Based on the collected data and analysis results, determine market segmentation criteria suitable for corporate goals

Select criteria for market segmentation based on factors such as demographics, geography, behavioral and psychographics

Determine which standards are most appropriate for your product or service and can provide a competitive advantage

Develop clear and unambiguous market segmentation criteria and descriptions that can be used in subsequent steps

Step 3: Identify potential market segments

Identify potential market segments based on identified market segmentation criteria

Study the needs, interests and purchasing behaviors of your target audience to understand their behavioral patterns and preferences

Identify key characteristics and differences of potential market segments to facilitate target market selection in subsequent steps

Step 4: Assess market segment attractiveness and competitiveness

Assess the attractiveness and potential profitability of each market segment

Consider factors such as market size, growth rate, number of competitors, and brand loyalty

Analyze the potential benefits and risks of market segments to determine which segments are most attractive and competitive

Study competitors’ performance and strategies in various market segments

Understand competitors’ market share and brand reputation in different market segments

Analyze their market positioning, product features and marketing strategies to better select target markets

Step 5: Choose your target market

Based on market segmentation assessment, select target markets suitable for corporate strategy and resources

Identify the market segments that the company can satisfy and gain a competitive advantage in

Select the number and size of market segments to ensure that the business can effectively serve and market to the target market

Determine the characteristics and needs of the target market to guide subsequent market positioning and marketing activities

Understand the consumer needs, preferences and demand motivations of your target market

Determine how to offer differentiated products, pricing and promotion strategies to target markets

Step 6: Develop market segmentation and target market strategies

Based on the selected target market, develop appropriate market segmentation and target market strategies

Develop personalized product, pricing and promotional strategies for target markets

Effectively reach target markets by selecting appropriate channels and communication methods

Determine how to build relationships with your target market and provide a great customer experience