ABSTRACT
This chapter provides managers with the working tools needed to formulate an initial or improved market definition. Market definition is important because it affects the set of competitive entrants, market boundaries, and performance measures. A solid market definition provides a sound conceptual framework for formulating management strategy. The dynamic nature of industrial and technology markets requires marketing executives to reassess markets on a regular basis. An important multidimensional view of market definition consists of customer groups, customer functions and uses, and technologies. 3-D Model, developed by Abell and advocated by Buzzell, is called 3-D analysis, selecting an appropriate three-dimensional "cell" defines the firm's market. The research findings regarding market definition characteristics provide an important extension to Abell's 3-D model of market definition. The Herfindahl-Hirschman Index (HHI) is a tool frequently used to assess market concentration levels. HHI is defined as the sum of the squares of the market shares of all firms in the market.
