Creating And Validating Market Segmentation

Segmentation requires the identification of customer differences and the reasons for these differences. Analyze customer data from internal and external sources to confirm and refine proposed segmentation. For products or product lines, this is often done by a product manager or marketer; for companies or divisions, by product and marketing leadership under the direction of the senior leadership team. Segmentation should be tested and validated in the market before being finalized. In this report, we define a five-step process for selecting segmentation dimensions (see Identifying Dimensions For Market Segmentation), then applying and testing a segmentation approach.