[Excerpt] Identifying markets is regarded as necessary for all companies and for research across many disciplines. In industrial organization (10) economics, the definition of markets is critical for antitrust and regulatory policy; in marketing, it is the basis for pricing, product development, positioning, promotion, and distribution. Market definition is crucial in strategic management, as well. By thinking about what the market is and what it could be, firms often uncover new opportunities for innovation. Successful innovations follow when firms identify new and more profitable segments of existing markets and redefine their own market, which they can serve with new product variants or new services. The nature of the market affects the firm’s identity and the skills or expertise that it needs to amass in order to be competitive (Geroski, 1998).
Kim, J-Y., & Canina, L. (2010). On the importance of market identification [Electronic version]. Retrieved [insert date], from Cornell University, School of Hotel Administration site: http://scholarship.sha.cornell.edu/articles/956