Market Segmentation: How to Do It and How to Profit from It, Revised and updated 4th Edition

Chapter 5

Portraying how a market works and identifying decision-makers

Summary

This chapter takes a detailed look at the way a market works in order to identify where decisions are made about competing products and services. It is these decision-makers who then proceed to the next stage of the segmentation project as it is their requirements you must understand in order to develop successful marketing propositions. Successful segmentation is based on a detailed understanding of decision-makers and their needs.

This book refers to those whose needs you must understand (if you are to develop successful marketing propositions) under the title of ‘decision-maker’. You may find it more appropriate in your market to refer to them as ‘specifiers’.

In some cases, the diversity of the decision-makers is such that it is necessary to divide them between more than one project. This is to ensure that the segmentation process is both manageable and arrives at meaningful conclusions.

The parameters for this, the second step in the segmentation process, as illustrated in Figure 5.1, are those established in the previous chapter when you determined the scope of your segmentation project.

Figure 5.1 The segmentation process – Step 2

In many markets, especially business-to-consumer markets, drawing a ‘market map’ and identifying decision-makers has been quite a simple exercise. However, even ...