9609 · 3.1.6
Market segmentation — FAQ
Frequently asked questions for 9609 Market segmentation. Direct answers first, then deeper explanation — then practise with marking.
Is segmenting a market the same as choosing a target market?
No, this is a common misconception. Segmentation is the analytical process of identifying and profiling different groups of buyers in a market. Targeting is the subsequent strategic decision of evaluating the various segments and selecting one or more of them to enter. In short, segmentation is the 'analysis' and targeting is the 'choice'.
Can a business use more than one segmentation base at a time?
Yes, and it is highly recommended for more precise targeting. This is known as multi-variable segmentation. For example, a luxury car brand might target a segment based on high income (demographic), a desire for status and performance (psychographic), and living in affluent urban areas (geographic). Combining bases creates a much richer and more detailed picture of the target customer.
Does every business need to segment its market?
While most businesses benefit significantly from segmentation, it is not a universal necessity. A business selling a truly undifferentiated commodity, like basic industrial salt or wheat, might adopt a mass marketing (undifferentiated) approach, as consumer needs are very similar. However, even in these cases, some basic segmentation usually occurs (e.g., industrial vs. consumer packaging). For the vast majority of consumer and business-to-business markets, segmentation is a critical tool for success.