I. Read the text and give the title. Sum up what the text says about the market-segmentation process.

Market segmentation is one of two general approaches to marketing; the other is mass-marketing. In the market-segmentation approach, the total market is viewed as being made up of several smaller segments, each different from the other. This approach enables businesses to identify one or more appealing segments to which they can profitably target their products and marketing efforts.

The market-segmentation process involves multiple steps (Figure 1).

The first is to define the market in terms of the product’s end users and their needs. The second is to divide the market into groups on the basis of their characteristics and buying behaviors.

The most common elements used to separate consumer markets are demographic factors, psychographic characteristics, geographic location, and perceived product benefits.

Demographicsegmentation involves dividing the market on the basis of statistical differences in personal characteristics, such as age, gender, race, income, life stage, occupation, and education level.

Psychographicsegmentation is based on traits, attitudes, interests, or lifestyles of potential customer groups. Companies marketing new products, for instance, seek to identify customer groups that are positively disposed to new ideas.

Geographicsegmentation entails dividing the market on the basis of where people live. Divisions may be in terms of neighborhoods, cities, counties, states, regions, or even countries.

Product-benefitsegmentation is based on the perceived value or advantage consumers receive from a good or service over alternatives. Thus, markets can be partitioned in terms of the quality, performance, image, service, special features, or other benefits prospective consumers seek. Many companies even market similar products of different grades or different accompanying services to different groups on the basis of product-benefit preference.

Once potential market segments are identified, the third step in the process is to reduce the pool to those that are (1) large enough to be worth pursuing, (2) potentially profitable, (3) reachable, and (4) likely to be responsive. The fourth step is to zero in on one or more segments that are the best targets for the company’s product( s) or capacity to expand. After the selection is made, the business can then design a separate marketing mix for each market segment to be targeted.

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