Reference no: EM131053048

You need to complete a market segmentation and target market selection on a start up company on renewable energy.

Who are our customers and how will we appeal to them? Homogeneity of needs and wants appear within the segment? Heterogeneity of needs and wants exists between the segment? Different within the segment should be small compared to differences across segments. The segment should be distinct enough so that its members can be easily identified. It should be possible to determine the size of the segment. The segment should be large enough to be profitable.

Step 1

Collect information about your potential customer base. If you're operating in a single geographic area, for example, data from the U.S. Census can break down the local population for you by age, nationality, income and family size. You can also use your own customer databases or hire a research or polling group to gather data for you.

Step 2

Break down the population into different market segments. You can segment the market by neighborhood; by demographic factors such as age or income; by lifestyle; or customer behaviors such as brand loyalty or cost-conscious shopping.

Step 3

Evaluate which segments are worth targeting. Target segments should be large enough to justify marketing to them, accessible through normal marketing channels and distinctive enough from other segments to need a separate market campaign. In addition, you must be able to identify the different needs of the segments you're going to target -- if you don't know how to market to teens, targeting them with ads won't be much use.

Step 4

Rank the market segments in terms of potential sales. The best criteria to use define a population that's large enough to generate maximum returns from your targeted campaign and homogeneous enough that one campaign should work for the entire segment. Prioritize your marketing budget accordingly.