There is a two step process in marketing segmentation: (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop marketing mixes.
I need some help understanding these two processes.
Why do the often fail and how can a firm increase the chances of success?
Naming of the broad product-markets:
This is the entire market for the product. For instance, if the product is baby food then all the households that use baby food are included in this market. It is important to be comprehensive and inclusive at this stage. It is important to include all the consumers of the product in the market. For instance, if we consider the car market, then we include all the potential purchasers of cars. At this step the marketer is comprehensive.
Segmenting these broad product-markets in order to select target markets and develop marketing mixes.
In the second step the marketer identifies segments or portions of markets that are different from one another. This allows the marketer to better satisfy the need of its potential customers. This means creating a ...
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