Introduction to Market Segmentation and Segment Bounding

July 23, 2010 by Hajara Saleeth in Marketing

Segmentation refers to “the identification of likeminded clusters of consumers who can be expected to behave in similar ways, making similar ways decisions in the marketplace in similar situations.”  When it comes to fitness products, segments can be based on gender, age, physical ability of the consumer and the income level.  Segmenting market should be done according to the STP process and thereafter develop a suitable marketing plan to deliver expected benefits. Segmenting the market involves a complicated and risky process as it can determine the success and failure of an organization because poor segmentation always leads to poor sales of the product.  Under this complicated process of segmentation, there are 03 major aspects discussed namely:

  1. Segment Bounding
  2. Segment Viability (Refer the Article on How to Evaluate Segment Viability)
  3. Segmentation Strategies

Segment Bounding

Segment bounding refers to “methods used to differentiate consumers and market segments. “. This imposes conditions to distinguish consumers from one another and this aims at finding the most appropriate segment and the customers belongs to it.

Segment bounding involves 03 steps:

  • Determine the ‘descriptor’ of the consumers/units of the segment-

This involves determining the segmentation variables. Companies have to identify proper and suitable segmentation variables as this is the fundamental of the success of the whole segmentation process. For fitness equipment market descriptors can be age, gender, income levels, life styles, personality, and physical ability of the user and the attitude of the consumer towards fitness products. The total market for the fitness products should be divided using these variables.

  • Determine the geographic location of the segment-

After determining the descriptors it gives the rise to identify the geographic locations of the proposed segments.  This includes factors such as region, city, density and climate of the proposed segment. Managers should identify these factors to determine the marketing plan of the product and should be customized according to the geographic location. For a fitness product geographic location may include the city or the town of which the proposed segment is operating.

  • Bound segments in ‘time’ to ensure that data is relevant and up to date for the time of use-

This evolves ensuring company obtains relevant and timely information in decision making process. This is a vital process since outdated to inaccurate data can make the segmentation effort a failure. In the fitness product market relevant up to date information can be obtained by employing research agencies (out sourcing) to gather data, online research, other published data such as government statistics and employing team of employees to gather information. But obtaining data by primary source (outsourcing or generating information by employing an in house research team) can be expensive but considered to be reliable.

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