Market segment
In marketing, market segmentation is the process of dividing a broad consumer or business market, usually consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of. In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles, or even similar demographic profiles. The overall aim of segmentation is to identify high-yield segments – those that are likely to be the most profitable or that have growth potential – so that these can be selected for special attention (i.e., become target markets). Many different ways to segment a market have been identified. Business-to-business (B2B) sellers might segment the market into different types of businesses or countries. In contrast, business-to-consumer (B2C) sellers might segment the market into demographic segments, such as lifestyle, behavior, or socioeconomic status [Wikipedia].
A market segment is a category of customers with similar likes and dislikes in an otherwise homogeneous market. These customers can be individuals, families, businesses, organizations, or a blend of multiple types. Market segments predictably respond to a marketing strategy, plan, or promotion. This is why marketers use segmentation when deciding on a target market. As its name suggests, market segmentation separates a market into sub-groups whose members share common characteristics. To meet the essential criteria of a market segment, three characteristics must be present:
there must be homogeneity among the everyday needs of the segment
there needs to be a distinction that makes the segment unique from other groups
the presence of a standard reaction or a similar and somewhat predictable response to marketing is required
Common characteristics of a market segment include interests, lifestyle, age, gender, etc. Common examples of market segmentation include geographic, demographic, psychographic, and behavioral [Investopedia].
How Market Segments Work: Identification and Example. Investopedia. Retrieved from: https://www.investopedia.com/terms/m/market-segment.asp
Market segmentation. Wikipedia. Retrieved from: https://en.wikipedia.org/wiki/Market_segmentation