Difference Between Market Segmentation & Target Market

by Kristeen Cherney; Updated September 26, 2017
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Market segmentation and target marketing are two steps of the marketing process. Although the two go hand-in-hand, there are distinct differences between them, as market segmentation must take place before a target market is determined.

Processes

Market segmentation occurs when a company decides that they want to identify a specific type of consumer to which they can market their product or service. A target market is determined once the company identifies which consumers to sell to.

Function

According to Kotler and Armstrong’s Principles of Marketing, market segmentation is used to research the entire market as a whole and then place consumers into separate groups based on common characteristics. The company then decides which group is best and concentrates on selling to them, which is also called target marketing.

Features

Market segmentation may be based on variables such as behavior, demographics (e.g., gender, age, education, and income), geography, and psychographic characteristics, or those based on lifestyle and personality.

Identification

A target market is identified once a company evaluates all possible market segments and determines which would be the most appropriate, and therefore profitable.

Positioning

Marketing a product through advertising, also known as positioning, cannot be properly executed before market segmentation takes place and a target market is determined.

References

  • Principles of Marketing; Philip Kotler and Gary Armstrong; 2006

Photo Credits

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