Service Market Segmentation is a process of dividing the whole market into distinct similar groups which have similar characteristics which may have similar needs, purchasing power or consumption patterns.

The main aim of segmentation is to find high yield segments so that the company can focus accordingly and can gain a more competitive advantage as well as more profit. Market segment must be measurable, sizable and accessible.  

The primary meaning of market segmentation to divide the mass market into groups with similar needs and wants.


market segmentation


Requirements for effective segmentation:

  1. Distinctiveness
  2. Measurable segments
  3. The substantial size of the segment
  4. Accessibility
  5. Actionable

A process of market segmentation:

1) Determine the need of the segment:

Firstly, determine who are the customers and what are their needs and wants? It is necessary to think about customers likes and dislikes and availability of products and services to them. To get a competitive advantage it is necessary to focus on the need of segment.

2) Identify the target segment: 

Marketers must have to be very clear about the target segment and type of common characteristic they have. For example, men deodorant would not sell if the company uses a female model to create awareness.

3) Identify expectations of Target Audience:

Once the target segment is decided it is necessary to find the expectations of the target segment. The product or service must meet the expectations of the target segment or audience. For this marketer must need to interact with target audiences so as they know better about them. For example, Kellogg’s K special was launched for those individuals who wanted to cut down their calories intake.

4) Create Subgroups:

The marketer must focus to define the groups effectively to it can easily reach the target audience. For example, female cosmetics come in various categories, like, creams and lotions for girls between 20-30 years must focus on fairness whereas creams and lotions for girls between 30-45 years must focus on age control effects.

5) Review the needs of the target audience: 

It is essential for the marketer to review the needs and preferences of individuals or groups and subgroups as the audience will respond to market fluctuations frequently.

6) Develop market strategies: 

It is necessary to promote a brand or service in each segment and all is to know is the same strategy cannot work for all segments as al the segments have different characteristics.

7) Review the behavior: 

Review the behavior of target audience frequently as it is not necessary that individuals have the same demand throughout the year. It may change according to market fluctuations, their perception may change and their interests may also change. To stay longer in the market it is vital to update themselves(marketers).

8) Implementation of marketing mix strategies:

This requires suitable products and services need to be designed and developed, at a suitable price, with suitable distribution channels, and an effective promotional program to get the best advantage as possible.

The relationship between Segmentation, Targeting, and Positioning:


   Relation b/w segmentation, targeting and positioning




5 thoughts on “Service Market Segmentation

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