ABSTRACT
The segmentation starts with customer needs. The term 'segmentation' appears to have been first coined by Wendel Smith in the 1950s. Segmentation is the division of a market into distinct sub-units of homogenous buyers. Segmentation takes place at two levels: the strategic level and the operational level. Commercial due diligence (CDD) uses strategic segmentation to understand the market structure and market dynamics that apply to the target company and operational segmentation to compare the effectiveness of the target's product and marketing strategy. The behavioural segmentation used in strategic segmentation differs from operational marketing segmentation because it is based on what consumers do rather than what they are or how they are organized. Strategic segmentation is about the circumstances in which customers find themselves. Segmentation is a process of critical thinking rather than the application of some predetermined set of criteria to the numbers.
