Briefly describe the steps in the segmentation process.
Answer: The seven steps in the segmentation process include:
1) Needs-Based Segmentation-Group customers into segments based on similar needs and benefits sought by customers in solving a particular consumption problem.
2) Segment Identification-For each needs-based segment, determine which demographics, lifestyles, and usage behaviors make the segment distinct and identifiable (actionable).
3) Segment Attractiveness-Using predetermined segment attractiveness criteria (such as market growth, competitive intensity, and market access), determine the overall attractiveness of each segment.
4) Segment Profitability-Determine segment profitability.
5) Segment Positioning-For each segment, create a "value proposition" and product-price positioning strategy based on that segment's unique customer needs and characteristics.
6) Segment "Acid Test"-Create "segment storyboard" to test the attractiveness of each segment's positioning strategy.
7) Marketing-Mix Strategy-Expand segment positioning strategy to include all aspects of the marketing mix: product, price, promotion, and place.