Market Segmentation Definition

Market researchers tend to think of the definition of market segmentation as a specific process to categorize customers and/or target customers.

Managers may think more broadly, using the term to refer to descriptions and specifications about customers, particularly as describing the demographics of customers.

The difference between market segmentation as a process and as a description of customers is simple:

As a process it seeks to define customer groups (or potential customers) that share common thoughts and/or feelings (psychographic) or common behaviors (such as product or service usage patterns based on how, where and/or in what circumstances they use--behavioral).

As descriptions of customers it looks to define groups of customers by demographic variables such as age, education, income, employment status, and/or marital status.

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