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Problem

In selecting a market segment, what are the three major criteria?

Step-by-step solution

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Step 1/3

Market Segmentation divides a market into small groups of customers with the similar interests and needs. In selecting a market segment, there are three major criteria that businesses must consider.

Step 2/3

The three major criteria are:

Criteria 1: Feasibility: The first criteria for selecting a market segment is feasibility, which refers to the extent to which a segment can be reached and served. Businesses must consider the size and growth potential of the segment, as well as the resources required to reach and serve it.

Criteria 2: Attractiveness: The second criteria is attractiveness, which refers to the profitability and potential of the segment. Businesses must consider the segment's buying power, as well as its willingness and ability to pay for the products or services being offered.

Criteria 3: Actionability: The third criteria is actionability, which refers to the ability of the business to develop and implement a targeted marketing strategy for the segment. Businesses must consider the competitiveness of the segment, as well as the presence of any barriers to entry.

Step 3/3

In selecting a market segment, businesses must consider feasibility, attractiveness, and actionability. By evaluating these criteria, businesses can identify the most promising market segments, and develop targeted marketing strategies that meet their unique needs. Effective market segmentation is an important step in creating a successful marketing strategy, as it allows a business to target its resources towards the most promising customer groups.