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:a. List of Contents . 1 b. Introduction and abstract 2 c. Explanation of the underlying requirements for market segmentation: 1. Market Definition i. Measuring the market share and market growth.. 3

ii. Recognize the relevant competitors 3 iii. Identify the firms current competitive position . 4 iv. Identify the nature of the market . 4 v. Purpose of the previous group of requirements . 4, 5 vi. Some suggested tools for implementing the previous requirements . 5 2. Actual reasons for market segmentation . 5, 6, 7, 8 d. An overview of major issues in segmentation .. 9, 10 e. List of references

Market Segmentation Introduction: Most of marketers agree that a business should be customer-focused in order to achieve the organizational objectives at all levels. Thus, most strategists try to design strategies that can better serve the target market. But, before designing strategies, they must well recognize the prospective market, customers needs, characteristics, preferences and different buying patterns. Then, they should combine the like-minded customers with each other in groups to represent segments of the market. This process is called market segmentation. Market segmentation is a process by which a strategist can divide the market into like-minded groups and put specific variables for segmentation which are based on the differences between customers (Hooley, Percy and Nicoulaud, 2008:206). Thus, it is a critical tool for accurate recognition of prospective customers needs and responding accordingly. However, not all businesses are satisfied with market segmentation as a concept although they really know the logic behind it. This is because segmentation may be difficult to apply in some markets or maybe given more attention than the market itself (Wilson and Gilligan, 2005:318). Therefore, a research for Lazarus Research Group (2006) has suggested a specific group of requirements that must be achieved by a strategist so as to create efficient and effective market segmentation. Thus, this paper will discuss the underlying requirements for accurate market segmentation. The topic will be discussed in a simple way that defines each requirement, suggest optimal tools for achievement and purpose of every single requirement. In addition, the information used in the discussion and explanation are very valuable because it is obtained from different resources to view the topic from diverse perspectives. What about an introduction for the issues used.

Explain the underlying requirements for market segmentation. Customer needs should be put at the heart of market segmentation process. But, how a strategist can recognize these needs and how he or she best serves the target customer. First, define the market as follow: a. Measuring the market share and market growth (McDonald, MSC,2010): Strategists should wisely estimate the current market share, in terms of value and size, and the expected future growth rate to be able to assess the attractiveness of the potential market. In this context, the strategist tries to weigh the expected net profit compared to the costs incurred in the segmentation process in an attempt to assure whether the segmentation will be profitable, or not.

b. Recognize the relevant competitors (McDonald, MSC, 2010): Strategies should identify the key competitors in the prospective market and study them very well to be capable of assessing the level of competition within the market. By collecting such information, they become ready to fight against the prospective competitors.