The market segmentation evaluation criteria After constructing a set of market segments in the STP process, the market segments are then subject to evaluation against a set criteria. This is a checkpoint stage in the STP process. Its goal is to ensure that the segments meet basic requirements and guidelines for usable segments. Main Evaluation

How to segment a market? (Technical aspects) There are two main approaches: cluster analysis (if data is available), otherwise segmentation trees. Cluster analysis Cluster analysis is an analysis designed to categorize objects to a pre-defined number of different groups, with each group being relatively similar on a range of selected attributes. The resultant groups are

Geographic Segmentation Base Advantages Considers cultural differences of different regions Good for firms with limited geographic reach needing to select a specific target market Great when there is significant socio-economic diversity and significant consumer behavioral differences across regions Geographic Segmentation Base Limitations Assumes that consumers in a geographic area are similar, which is generally unlikely

Quick Study Notes for Market segmentation Definition of market segmentation The process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets. What are segmentation bases? A definable characteristic, identity or behavior of an individual consumer that can be utilized to classify consumers