Determining the target market starts with defining the market segments. Market segmentation is a market classification process that divides the overall market of a product into several consumer groups based on differences in consumer needs and desires, purchasing behaviors and purchasing habits through market research. Each consumer group is a market segment, and each market segment is a group of consumers with similar demand tendencies.
It should be noted that although market segmentation takes into account the region, it is not a simple regional concept. For example, the Southeast Asian market that people often talk about can only be said to be a regional market. The main consideration of market segmentation is the convergence of customer groups’ needs.
The overall market is large, and often a single company cannot meet the needs of all groups. There are two main reasons for this.
(1) The existence of heterogeneous consumer needs. For example, for the same mobile phone, the elderly need a mobile phone with large buttons or large screen fonts, while female consumers may need a mobile phone with softer colors. In this way, elderly consumers, female consumers, etc. can be segmented according to functional needs.
(2) Companies have their own advantages in different aspects. For example, Samsung mobile phones are strong in mobile phone appearance design, so they focus on serving consumers who pursue appearance.
Therefore, market segmentation has internal motivations.