Market segmentation[edit]

Market segmentation is the basis for a differentiated market analysis. Differentiation is important. One main reason is the saturation of consumption, which exists due to the increasing competition in offered products. Consumers ask for more individual products and services and are better informed about the range of products than before. As a consequence, market segmentation is necessary.^[2] Segmentation includes a lot of market research, since a lot of market knowledge is required to segment the market. Market research about market structures and processes must be done to define the “relevant market”. The relevant market is an integral part of the whole market, on which the company focuses its activities. To identify and classify the relevant market, a market classification or segmentation has to be done.^[3]

Dimensions of market analysis[edit]

David A. Aaker outlined the following dimensions of a market analysis:^[4]

• Market size (current and future)
• Market trends
• Market growth rate
• Market profitability
• Industry cost structure
• Distribution channels
• Key success factors
• Key success Details