Market Segmentation

Consumer diversity is increasing rapidly and firms have long sought to differentiate their products relative to competitors. This is where market segmentation comes in. while these has been a strong move towards one to one marketing in recent years there are few examples of successful implementation particularly in consumer markets. Market segmentation provides a proven way that can improve profitability without the investment in systems and sales resources needed for one to one marketing.


Market segmentation is the first of three steps in developing marketing strategy. Segmentation groups customers with similar needs and responses. Targeting determines which segments to serve, positioning is about how the product or service will be perceived by target market especially in comparison to other competing brands.

The objective of market segmentation is to more accurately meet the needs of selected customers in a more profitable way.

Precisely how this can be achieved will vary by company capability for example a single product company may boost sales with out much advertising costs. if it can target consumers with a high likelihood of product. On the other hand, a company with several brands in a category will benefit by positioning each brand with in the portfolio against a distinct set of consumer needs. Ideally each brand should be sufficiently distinct so that there is a little cannibalization.