Rachel Content Marketer at CleverX with a massive thing for people, conversations, and marketplaces.

Market Segmentation Vs. Target Markets

3 min read

Introducing market segmentation Vs. Target Markets

Market segmentation is, in essence, the system of determining how to divide a target market or an organization’s customers into different groups based on versatile characteristics. Using these divisions, an organization can target specific groups and revamp its sales and advertisements.

 A target market is a group of consumers that are statistically most likely to buy the company’s products or services. Target marketing involves breaking down the entire market into various segments and planning marketing strategies accordingly for each of them. This way, marketing, and advertising can be efficient and optimized.

Market Segmentation Key Elements

Here are a few important elements to look at while segmenting the market for an organization:


Without knowing just how many potential consumers are encompassed in a divided group, the pros cannot be ascertained and hence there could be risk involved. Commercial advertising and changes in product placement come at a price for the organization. If the number of consumers and their potential purchases cannot be measured, the organization cannot accurately create a marketing budget to target the segment.


Scrutinizing and targeting a new market segment is the first step towards creating a niche market. But before expending time, energy, and money into the segment, one needs research data on estimated profits and how long to utilize the market. In the end, the market segment should be a profitable venture


Every market segment has a different response to marketing elements, the main ones known as the 4Ps. A target market group will be identified based on reactions to the product, production, or advertising methods for the product, their placement, and the price point given. When a group of consumers inside a specific market expresses different demands for a product or service, it morphs into its own segment. The organization then devises separate marketing strategies to reach all of the segments.

Target Market Key Elements

There are several elements in play while creating an efficient target market, based on various characteristics. Some of them are:

Demographic – This simply means defining the target market based on characteristics like gender, age, income level, education level, and other similar aspects.

Behavioral – This approach is simply based on the frequency of use or habitual behavioral traits that can be evaluated and used while trying to find a target audience.

Psychographic – Sometimes customers don’t fit into a particular group based on outward characteristics, but more based on internal attitudes and values. These are psychographic characteristics.

The relationship between market segmentation and target markets

Both market segmentation and target markets are major concepts of marketing and are the foundations of marketing strategy. An organization can identify an efficient target market only after successfully segmenting the market accordingly. It is practically impossible to market a product before market segmentation and determining a target market.

Evaluating market segments and target markets for a business

While evaluating market segments, one must consider the following factors: 

Differentiation – The company must be able to identify and measure the differentiating attributes of the various market segments.

Accessibility – The segments have to be accessible through various communication and distribution channels.

Profitability – The segment needs to have enough potential profits to justify putting in the time and resources in the division.

Durability – The segments need to be stable enough so that, there is minimal impact with each change to the existing products and services, or even with the introduction of new ones.

Market segmentation

Here’s a simple, straightforward process to segment markets for your business.

Create an objective

Identify customer segmentation models and variables, especially those that apply to your specific market, and develop a hypothesis keeping your objectives in mind.


Collect raw data, analyze the results, and develop your segments accordingly. 


You will find several market segments useful, but choose your most viable option in reference to your objectives.


Select your target segment and identify the implications of this division. Make decisions strategically, based on the target segment, project goals, product or service, and market viability.


Ideate and communicate the launch plan internally in the company, and then proceed to execute to the market. 

How to identify target markets

To successfully identify target markets, these are factors that need to be assessed:

Current customer base

Look for common characteristics and interests in your existing customers, especially your best and most regular ones. A similar customer base would most likely also benefit from your product or service.


Researching your competition and establishing what markets they cover is very important. This way, instead of wasting resources on going after the same market, you could instead look for a niche market that they have overlooked.


Figure out not only who requires your product or service, but also who is most likely to buy it. Think about factors like age, gender, and occupation. Also, consider the psychographics of your target.

Target market strategies 

Listed below are three basic target market strategies any business can use:

Differentiated Marketing

Differentiated marketing is generally known as ‘segmented’ marketing. It entails taking out primary target segments that have the most potential value for the company and then developing separate marketing strategies for each of them. This strategy is very common as companies find it efficient and logical to design concentrated strategies for specific segments. Segmented market targeting, in essence, shows that consumer groups respond well to personalization

Concentrated Marketing

Concentrated marketing is often called ‘niche marketing’. Essentially, niche marketing puts all of its focus on one or two specific consumer groups. Companies channel their marketing efforts towards their uniquely defined segment of the population, with the aim of dominating the entire market of this particular segment over their competitors. This way, the company grows exponentially and creates loyalty and long-lasting relationships with their ideal consumer groups.


Micromarketing goes just that one step further than concentrated marketing by targeting a specific group within a niche market. This strategy is highly targeted as all marketing efforts are focused on the distinct characteristics of these small groups or individuals. It uses maximum personalization and thus caters to a lot of wants and needs of the particular consumer group, thereby ensuring their loyalty and the organization’s growth.


From a hierarchical perspective, the next step after market segmentation in terms of optimum efficiency would be making target markets. Evaluating market segments is critical and essential for marketing strategy development. By dividing the market into segments, businesses can better position products and services to target their specific customers’ needs and desires. Better targeting customers means better returns on marketing investment. 


Rachel Content Marketer at CleverX with a massive thing for people, conversations, and marketplaces.

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