An engineering methodology to identify profitable market segments for the use of new materials is presented and illustrated by application to the automobile industry. The method has three parts: empirical, statistical and analytical. The first measures company preferences for the important attributes of a use of a material, applying single-attribute utility functions. The second identifies market segments, by determining significant differences between measured preferences with t-tests. The third estimates the premium these market segments would pay for a product made of a new material, using multiattribute utilities, and thus determines profitable market segments. The case study of valve trains containing ceramic components defined two market segments: companies with either a broad world market or a narrow specialty. The immediate buyers of these valve trains are likely to be producers of high-value, six-cylinder automobiles, who seem prepared to pay a significant premium for this product. Defining Markets for New Materials Mangin et al.