Market segmentation is segmenting or dividing the market. The dividing process is guided by a logical conditions and theories. Main objective of the market segmentation is to view or identify the whole market in terms of some common needs or characteristics that relevant to the product or service.

Market segmentation is the process of dividing the market into unique subsets of consumers in respect of common needs, behavior or characteristics for selecting one or more segments to targeting and establishing positioning.

Head-on competition can easily avoid by analyzing competitors target market and differentiate offering than the competitors on basis of price styling, packaging, promotional appeal, method of distribution, and superior service.

How Market Segmentation works:

  • By analyzing the customer needs and setting the target market, specialized goods and services can be developed easily which meet the best need for the end users and promote in the most effective way to get most response. If needed, new product may be launched using the synergy to fill product gaps revealed by the segmentation research.
  • Segmentation study also guides the redesign or repositioning of a product/brand or find out new market segments.
  • By the segmentation research, the best promotional appeal [e.g. advertising media] can easily identify.

Market segmentation: where its position in marketing strategy:

Generally Marketing Strategy goes with three Tasks.

1. Market Segmentation
2. Target Market
3. Market Positioning

Marketing segmentation is the initial Step, where the whole market is divided on basis of some common or shared characteristics. After that, marketers must select best/promising segments to work on. This selection process is based on a specific marketing mix, i.e. product, price, place and promotion for each distinct segment. The final stage is positioning, i.e. consumer first recall this brand as better than competitors.


This article is written based on – 
Book: Consumer Behavior, Eight Edition, by Leon G. Schiffman and Leslie Lazar Kanuk.