Final answer:
Value-based market segmentation is a six-step process that includes identifying the market, segmenting the market, evaluating market segments, targeting the most valuable segments, positioning the product, and developing a tailored marketing mix.
Step-by-step explanation:
Steps in the Value-Based Market Segmentation Process
The value-based market segmentation process involves several critical steps that help businesses target and engage the most appropriate segments of the marketplace effectively. Although sources vary on the exact number and titles of these steps, a typical six-step process includes:
- Identifying the market to determine who the potential customers are.
- Segmenting the market based on specific criteria such as demographic, geographic, psychographic, and behavioral factors.
- Evaluating the market segments to understand their attractiveness and the value customers place on different attributes.
- Targeting the most valuable segments, focusing on those that offer the most potential for the business.
- Positioning the product or service offering to appeal to the targeted market segments.
- Developing a marketing mix that is tailored to the needs, behaviors, and preferences of the chosen segments.
In this process, businesses must carefully research each segment and assign a priority level, which could be done on a scale from 1 to 10, with careful attention paid to segments that score the highest.
However, the decision on which segment to target may also depend on the strategic fit, regardless of the numerical score.
These steps are essential to ensuring a company's marketing efforts are focused and efficient, by reaching out to groups of consumers who are most likely to respond positively to the products and services offered.