Difference Between Market Segmentation and Target Market

What is Market Segmentation?

Market segmentation is the process or activity of dividing the entire market into subgroups for a convenient approach. These submarkets are divided based on their foundation of specific criteria. In this strategy, a heterogenous market which has distinctively alike submarkets is chosen.


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The concept of segmentation was first introduced by Smith in 1957. Even if the market looks different and diversified there are some characteristics that the submarkets of this market have in common. These submarkets consist of customers with similar features and interests.

All the customers do not have similar needs. Identification of customers is one of the fundamentals of this strategy. It is much simpler to provide a small submarket of similar characteristics than catering the products to a vast diversified market.

After creating these submarkets, a common product is launched that will fulfil the needs of this particular niche. Several characteristics like income, personality traits, age etc. are taken into consideration while creating these submarkets.

The entire market is tapped more conveniently. The efforts and inventory of a firm are concentrated effectively and economically. Advertising the products and thereby selling them to these submarkets is done optimally.

What is Target Market?

The market that is chosen from the segmentation process conducted before, which is targeted for product supply is known as the target market. The objectives are taken into account while segmentation is also held accountable while targeting a certain submarket.

The more profitable segment or the one where there are lesser competitors is targeted by the managers. Some companies follow the scattergun approach, also known as undifferentiated marketing, while others follow concentrated or differentiated marketing.

Concentrated marketing is also known as niche marketing. As the word suggests, the company focuses on one submarket at once. Focusing on more than one submarket is known as differentiated marketing or multi-segmented marketing.

The company’s resources, features and benefits of the products and the characteristic feature of the segment where they are supposed to be supplied are considered and examined.

There are several targeting strategies like standardization, differentiation, and focus. Focus is a combination of standardization and differentiation. The attractiveness of the submarket forms the foundation of the targeting strategy.

In this strategy, choosing the right segment is extremely important. It is the stage that is implemented after segmentation. Selecting a particular segment to target is the brief activity in this strategy.

Difference Between Market Segmentation and Target Market

  1. In market segmentation, the entire market is focused, on the other hand, in a target market, a submarket is focused.
  2. In market segmentation, an entire market is divided, on the other hand, in a target market, a submarket is targeted.
  3. Market segmentation is the step before a target market, on the other hand, a target market is a process that is done after market segmentation.
  4. Market segmentation is comparatively a bigger process, on the other hand, the target market is a relatively intricate process.
  5. The criteria of market segmentation are personality traits, interest in products, need etc., while in target marketing the attractiveness of the submarket is considered first.

Comparison Between Market Segmentation and Target Market

Parameters Of ComparisonMarket SegmentationTarget Market
MeaningDividing an entire market based on the customers’ needs, and interests, into submarkets, is known as market segmentation.Targeting submarkets based on their attractiveness or similarity is known as a target market.
CriteriaInterests, needs, age etc.Mutual characteristics of a segment
FundamentalsKnowing your consumersKnowing your submarket
AimTo divide a diverse marketTo target key features of a submarket

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  1. https://link.springer.com/chapter/10.1007/978-1-4039-3741-4_3
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