Customer segments are identified through the process of market segmentation. The target market is chosen as a result of these efforts.

Market segmentation is a marketing practice. It involves separating potential customers or clients into a group or segment based upon identified characteristics. The objective is to be able to develop marketing and sales plans that will address the needs or wants of the customer. If done correctly, the group will have common needs or wants that relate common demographic characteristics.

What is a Good Market Segment?

A good market segment is one in which the members in that segment or the consumers in that segment are similar to each other. That is, they have something in common.

At the same time, those members or those consumers are going to be somehow different from people that are not in that market segment

The segment must be large enough to be profitable. Of course, this depends greatly upon what the product is or what the services that we provide, the price, and how many consumers we need in order to be profitable.

Finally, the business (or marketers) must be able to identify those in the market segment and have an ability to reach them by communication and promotion efforts.

What is a Target Market?

When we market we want to choose an appropriate target. In other words, we don’t expect to sell everything to everybody. This makes sense, as there we have so many options out there in the marketplace that as a consumer we’re going to pick and choose what we think is best for us.

A marketer we shouldn’t expect that everybody will buy whatever product or service we’re selling.