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How Do We Identify and Understand Markets?

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–How do we identify and understand markets?

As a student of marketing, you have already learned that the main purpose of modern marketing is to serve customers. If the organization really believes in this philosophy, that is, “the Customer Rules,” it only remains for the organization to focus on researching and understanding its customers and then delivering products and services to the customer that will not only meet the customer’s needs, but satisfy the customer in a way that will keep the customer coming back to our organization to do business with us. Therefore, often the first assignment for the marketing function is to gather and analyze information about customers. Today, that usually means first attempting to understand the structure of the marketplace.

Understanding the Marketplace and Different Customer Segments

The main goal of market segmentation (dividing the market into different portions based on differences in customers) is to better understand the needs of our customers thus we need a structured approach to attain this goal. A simple seven-step approach follows:

Step One: Identify the type of market with which you will be dealing

Step Two: Analyze the areas of satisfaction you are attempting to provide to this market, that is, what wants or needs do you intend to satisfy?

Step Three: Select dimensions with which to segment the market

Step Four: Based on the selected dimensions, identify the segments in the market under study

Step Five: Evaluate whether the segment in which you are interested meets the four criteria for effective segmentation

Step Six: Create a profile of the customer identified including purchasing behavior expectations

Step Seven: Combine the segmentation analysis with other analyses related to the product, market, and business strategy.

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