The first step in dividing a market into distinct customer groups is segmenting. This process involves analyzing the broader market and breaking it down into smaller, more manageable segments based on various criteria such as demographics, psychographics, geography, and behavior. By segmenting the market, businesses can identify specific groups of customers that have similar needs and preferences. This is essential for developing tailored marketing strategies that resonate with each segment.
Targeting, while important, follows segmentation; after segments are identified, a company determines which of these segments it will focus on. Positioning comes even later in the process, involving the creation of a distinct image and identity for a product or brand in the minds of the target customers. Thus, segmenting is foundational and necessary to ensure that subsequent steps in the marketing process—targeting and positioning—are effective and grounded in a clear understanding of the market.