Strategic Marketing Basics

The general approach includes:

 

1. Identifying several factors that could explain or characterize purchasing or consuming behaviours within a market.

 

2. Choosing the most discriminating criteria (with regard to purchasing and consuming the product or service) and splitting the market into more homogeneous sub-groups based on these criteria

 

3. Measuring the size, potential and attractiveness of the identified segments.

 

4. Establishing the profiles of the various segments.

 

Identification of the factors explaining or characterizing the buying or consuming behaviour will be determined using a market research (generally a quantitative study preceded by a qualitative one - see marketing information tools). This is followed by a factor analysis http://en.wikipedia.org/wiki/Factor_analysis and/or a typological or cluster analysis http://en.wikipedia.org/wiki/Cluster_analysis  allowing for the emergence of homogeneous groups.

 

Once the segments are defined, marketing analysts should conduct a study and evaluation phase including a measure, if possible, of the size of each segment (expressed in number of potential customers, in potential purchasing volume and in value). The potential and the attractiveness of each segment will also be estimated taking account its evolution over time (growing, stable or declining segment), the level and intensity of the competition, risk elements, etc. This will be key when taking up the targeting decision (see targeting chapter).

 

The final step consists in identifying the segment profiles, thanks to the data from the market research. This will be necessary to implement communication and distribution policies. This profile generally includes socio economic and behavioural data.