Q1) When describing the process of market segmentation one must first make consideration for what mark segmentation is. According to Gupta (2005), one can consider market segmentation to mean establishing a submarket which in essence shares some of the characteristics with a core product but has been targeted to meet specific demands of customers. In essence, one could consider a market segment to be any relatively homogeneous group of customers and market segmentation to be the separation of prospective buyers into the said markets with the intent to direct special marketing efforts towards these potential customers.
In describing the process of market segmentation one places into consideration the Berkowitz et al. (2000) process which postulates that all market segmentation starts with first linking needs to actions insofar as marketers must first identify that a need for the grouping of customers based on the similarity of their needs must exist. It is upon this foundation that one establishes that the market should be segmented, so the next step is to determine what market segmentation strategy should be employed depending on the nature of the business. It can be that given the nature of the company one might have to determine whether or not to segment a single product (Or service) into multiple segments or if one should segment multiple products into multiple segments.
In order to begin the process Day (1980) proposed a top-down approach in which a firm would start with their total population of customers and then segment that market (Conversely a bottom-up approach could be utilized in which a firm would build their case from a single customer).
Now that it has been determined what steps a firm might go through in order to establish a market segmentation one should question how this activity can contribute to the profitable development of a business. There is little question that by targeting certain consumers, a business might be better equipped to meet the said consumers’ needs and as such provide extra value.