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 segmentation
The 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 [1] create a more accurate profile of specific [edit]Demographic

Segmentation Segmentation

Segmentation by Age, gender, Income, social class, etc. [edit]Psychographic

Psychographics is the science of using psychology and demographics to better understand consumers. Psychographic segmentation: consumer are divided according to their lifestyle, personality, values. [2] People within the same demographic group can exhibit very different psychographic profiles. [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. Although industrial 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 specific basis, to provide a close match 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 from positioning (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.

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]Benefits Segmentations according to benefits sought by the consumer.

In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product to 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 a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&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 the target market benefit from the product?

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 Investigate intellectual property issues and search patent data 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 Concept by asking a sample of prospective customers what they think of the idea. Usually via Choice 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 the Fourt-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 its packaging) 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 customer acceptance 6. Technical Implementation New program initiation Finalize Quality management system Resource estimation

Requirement publication Publish technical communications such as data sheets Engineering operations planning Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies - what-if planning

7. Commercialization (often considered post-NPD) Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is 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 of consumers. 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

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 eyecatching title.

Changes in Economic Climate

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.