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A market segment is a classification of potential private or corporate customers by one or more

characteristics, in order to identify groups of customers, which have similar needs and demand similar

products and/or services concerning the recognized qualities of these products, e.g. functionality, price,

design, etc.

An ideal market segment meets all of the following criteria:

It is internally homogeneous (potential customers in the same segment prefer the same product

qualities).

It is externally heterogeneous (potential customers from different segments have basically different

quality preferences).

It responds similarly to a market stimulus.

It can be cost-efficiently reached by market intervention.

The term segmentation is also used when customers with identical product and/or service needs are

divided up into groups so they can be charged different amounts for the services.

Geographic segmentationThe market is segmented according to geographic criteria- nations, states, regions, counties, cities,

neighborhoods, or zip codes. Geo-cluster approach combines demographic data with geographic data to

create a more accurate profile of specific[1]

[edit]Demographic Segmentation

Segmentation by Age, gender, Income, social class, etc.

[edit]Psychographic Segmentation

Psychographics is the science of using psychology and demographics to better understand consumers.

Psychographic segmentation: consumer are divided according to their lifestyle, personality, values.

People within the same demographic group can exhibit very different psychographic profiles.[2]

[edit]"Positive" market segmentation

Market segmenting is dividing the market into groups of individual markets with similar wants or needs

that a company divides into distinct groups which have distinct needs, wants, behavior or which might

want different products & services. Broadly, markets can be divided according to a number of general

criteria, such as by industry or public versus private. Althoughindustrial market segmentationis quite

different from consumer market segmentation, both have similar objectives. All of these methods of

segmentation are merely proxies for true segments, which don't always fit into convenient demographic

boundaries.

Consumer-based market segmentation can be performed on a product specificbasis, to provide a closematch between specific products and individuals. However, a number of generic market segment systems

also exist, e.g. the system provides a broad segmentation of the population of the United States based on

the statistical analysis of household and geodemographic data.

The process of segmentation is distinct frompositioning(designing an appropriate marketing mix for each

segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize

the groups to address; to understand their behavior; and to respond with appropriate marketing strategies

that satisfy the different preferences of each chosen segment. Revenues are thus improved.

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Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can

have different industry structures and thus have higher or lower attractiveness

Once a market segment has been identified (via segmentation), and targeted (in which the viability of

servicing the market intended), the segment is then subject to positioning. Positioning involves

ascertaining how a product or a company is perceived in the minds of consumers.

This part of the segmentation process consists of drawing up a perceptual map, which highlights rival

goods within one's industry according to perceived quality and price. After the perceptual map has been

devised, a firm would consider the marketing communications mix best suited to the product in question.

[edit]Behavioral Segmentation

In behavioral segmentation, consumers are divided into groups according to their knowledge of, attitude

towards, use of or response to a product.

[edit]Occasions

segmentation according to occasions.we segment the market according to the occasions.

[edit]BenefitsSegmentations according to benefits sought by the consumer.

Inbusinessandengineering,new product development (NPD) is the term used to describe the

complete process of bringing a newproductto market

1. Idea Generation is often called the "fuzzy front end" of the NPD process

Ideas for new products can be obtained from basic research using aSWOTanalysis(Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends,

company'sR&Ddepartment, competitors, focus groups, employees, salespeople, corporate

spies, trade shows, or Ethnographic discovery methods (searching for user patterns and

habits) may also be used to get an insight into new product lines or product features.

Lots of ideas are being generated about the new product. Out of these ideas many ideas are

being implemented. The ideas use to generate in many forms and their generating places

are also various. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea

generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to

support your ideas in the Idea Screening Phase (shown in the next development step).

2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them.

The screeners should ask several questions:

Will the customer in thetarget marketbenefit from the product?

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What is the size and growth forecasts of the market segment/target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product?

Will the product be profitable when manufactured and delivered to the customer at the

target price?

3. Concept Development and Testing

Develop the marketing and engineering details

Investigateintellectual propertyissues and searchpatentdata bases

Who is the target market and who is the decision maker in the purchasing process?

What product features must the product incorporate?

What benefits will the product provide?

How will consumers react to the product?

How will the product be produced most cost effectively?

Prove feasibility through virtual computer aided rendering, and rapid prototyping

What will it cost to produce it?

Testing the Conceptby asking a sample of prospective customers what they think of the

idea. Usually viaChoice Modelling.

4. Business Analysis

Estimate likely selling price based upon competition and customer feedback

Estimate sales volume based upon size of market and such tools as theFourt-Woodlock

equation

Estimate profitability and break-even point

5. Beta Testing and Market Testing

Produce a physical prototype or mock-up

Test the product (and itspackaging) in typical usage situations

Conduct focus group customer interviews or introduce at trade show

Make adjustments where necessary

Produce an initial run of the product and sell it in a test market area to determine customeracceptance

6. Technical Implementation

New program initiation

FinalizeQuality management system

Resourceestimation

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Requirement publication

Publishtechnical communicationssuch asdata sheets

Engineeringoperations planning

Department scheduling

Supplier collaboration

Logisticsplan

Resource plan publication

Program review and monitoring

Contingencies - what-if planning

7. Commercialization (often considered post-NPD)

Launch the product

Produce and placeadvertisementsand otherpromotions

Fill thedistributionpipeline with product

Critical path analysisis most useful at this stage

8. New Product Pricing

Impact of new product on the entire product portfolio

Value Analysis (internal & external)

Competition and alternative competitive technologies

Differing value segments (price, value, and need)

Product Costs (fixed & variable)

Forecast of unit volumes, revenue, and profit

Product adaptation is the process by which a company adjusts and improves upon a product to make it

more appealing to the target market. The owner might adapt her own product or improve upon an existing

product offered by another company. It's important for a business owner to continuously evaluate her

product line to determine whether adjustments are in order.

Target Market

Noticing changes in the moods, opinions and needs of your target market is a key factor in the product

adaptation process. Business owners use feedback from focus groups and online forums to keep in touch

with the needs of customers. A climate of ever-changing technology also affects the opinions ofconsumers. If you see a trend developing, such as a demand for a new feature for an existing software

program, adapting the product to that consumer need might help increase sales.

Packaging

Response to the packaging of the product is another important consideration when evaluating the need

for a product adaptation. Your decisions regarding packaging should depend on the cost, added value

and protection the package provides for the actual product inside as well as how attractive it is to

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customers. While changing the packaging of the product could confuse some longtime, dedicated users,

a simple packaging change may help boost sales of the item in other cases. If you get a lot of comments

from customers to the effect of "This is a great product, but I never would have picked it up if my friend

hadn't referred it to me," you could have a packaging issue. For example, a publisher might adapt a book

by changing a plain and uninteresting cover into a more colorful and descriptive cover with an eye-

catching title.

Changes in Economic Climate

Changes in the economic climate due to matters that are out of your control affect product adaptation. If

problems in the economy cause an overall reduction in sales, consider using less expensive materials or

modifying the overall design of the product to make it more affordable for consumers.

Actions of Competitors

It's also important for a business owner to keep a close eye on competing products when evaluating his

own offering. The actions and product offerings of competitors is a key factor that leads to product

adaptation. For instance, if a competing baby stroller company starts offering a stroller with a built in GPS

tracking device that customers love, you could be left behind if you don't eventually adapt your own

strollers with this feature.

PRODUCT STANDARDIZATION

his I also known as Global Standardization, which means developing standardized products marketed

worldwide with a standardized marketing mix. An example of this is the Big-Mac of McDonald's. They

used the same brand name and same slogan for the same product all over the world. This assumes

that their is a large, similar target market that can be targeted globally. McDonald's and Coca-Cola are

two examples of companies using this strategy.

The main advantage of this strategy is cost saving. Using standardized products across all your

business units helps generate economies of scale. These savings can then be applied to your business'

margin, lower price to consumer, or reinvested into the company for research and development. In

the examples of Coke and McDonald's they use their cost savings to offer low prices to consumers,

they then make their money with smaller margins spread across high numbers of consumers.