Step 8: Selecting the Target Segment(s)

Abstract

In Step the big decisions are made. Informed by all the insights gained during the entire market segmentation analysis, the time has come to commit. Of the many available market segments, one or a small number have to be chosen and declared target segments. This critical step builds on the segments extracted in Step 5, profiled in Step 6, and described in Step 7, as well as on the segment attractiveness criteria selected and weighted in Step 2. The process requires the involvement of the segmentation team and the advisory committee because decisions made at this point will result in a long-term organisational commitment affecting all organisational units. The two key questions that need to be answered in this step are: (1) which segment would the organisation most like to cater to; and (2) which organisation would members of the market segment most like to buy their products or services from?