Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.
Each of these product types is designed to meet the needs of specific market segments.
Invert sugar and sugar syrups, for example, are marketed to food manufacturers where they are used in the production of conserves, chocolate and baked goods.
Depending on company philosophy, resources, product type or market characteristics, a businesses may develop an undifferentiated approach or differentiated approach.
In an undifferentiated approach, the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers.
Sugars marketed to consumers appeal to different usage segments – refined sugar is primarily for use on the table, while caster sugar and icing sugar are primarily designed for use in home-baked goods.
The process of segmenting the market is deceptively simple.
in a very early example of simple market segmentation.
With access to group level data only, brand marketers approached the task from a tactical viewpoint.
Many marketers use the S-T-P approach; Segmentation→ Targeting → Positioning to provide the framework for marketing planning objectives.