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Market Segmentation vs. Target Market: What's the Difference?

Edited by Aimie Carlson || By Janet White || Updated on October 30, 2023
Market Segmentation divides a market into subsets based on variables, while Target Market identifies the specific group businesses aim to sell products/services to.

Key Differences

Market Segmentation and Target Market are foundational concepts in marketing but serve distinctive purposes. Market Segmentation is the practice of dividing the overall market into segments or sub-groups, typically based on demographics, geography, psychographics, and behavioral traits. This is crucial for understanding the varied customer bases present in a wider market. In contrast, Target Market is the identified segment of the market to which a company specifically aims its products or marketing efforts.
Further diving into these concepts, Market Segmentation enables businesses to understand and categorize the various types of consumers who might have different needs and preferences. This division helps businesses cater to varying consumer needs with appropriate and specific marketing strategies. On the other hand, Target Market necessitates businesses to pinpoint precisely which segment or segments of the market they wish to cater to. This is vital for devising focused and effective marketing strategies.
Moreover, it is pivotal to understand that Market Segmentation generally precedes the identification of a Target Market. Through segmentation, marketers obtain a comprehensive overview of the assorted market sectors, helping them discern consumer needs, behaviors, and preferences. Afterward, the Target Market is determined, which allows businesses to direct their products and marketing strategies toward a defined group, optimizing resource utilization and enhancing marketing efficacy.
Considering Market Segmentation, it is more of an exploratory strategy, allowing businesses to uncover various market opportunities, understand customer pain points, and potentially discover underserved segments that can be targeted effectively. In juxtaposition, the Target Market strategy is about precision and concentration, focusing resources and strategies toward serving a particular market segment, ensuring that marketing communications, products, and services are finely tuned to meet the specific demands of that segment.
In practical applications, Market Segmentation and Target Market work harmoniously, even though they operate at different stages of marketing planning. Market Segmentation provides the comprehensive view and understanding of the entire market landscape. Subsequently, the Target Market is defined to hone marketing strategies, aligning them meticulously with the desires and needs of the most relevant consumer segment.

Comparison Chart

Primary Purpose

Divides market based on various criteria
Focuses on a specific segment

Role in Marketing

Exploratory and analytical
Precise and focused

Implementation Phase

Early market analysis
Strategic planning & execution

Resource Allocation

Diverse across segments
Concentrated on one segment

Strategy Focus

Understanding diverse consumer needs
Catering to specific consumer needs

Market Segmentation and Target Market Definitions

Market Segmentation

Market Segmentation identifies consumer subsets, tailoring marketing strategies to meet diverse needs.
Fast-food chains utilize Market Segmentation to offer varied menus across different geographic locations.

Target Market

Target Market designates which market segment a company’s resources and campaigns will prioritize.
Toy manufacturers typically designate children and their parents as the Target Market.

Market Segmentation

It divides consumers into segments, ensuring varied marketing approaches for each group.
Car manufacturers apply Market Segmentation to offer luxury and budget models to different income groups.

Target Market

Target Market is the specific group a company chooses to serve with its products or services.
Cosmetic brands might select young adults as their Target Market for skincare ranges.

Market Segmentation

Market Segmentation categorizes a market into clear, distinct groups with similar needs.
With Market Segmentation, the smartphone industry identifies various age groups with different tech needs.

Target Market

It pinpoints the segment of the market where a company’s marketing efforts are concentrated.
Luxury brands typically target high-income consumers as their primary Target Market.

Market Segmentation

Market Segmentation tailors marketing strategies by recognizing and targeting distinct consumer groups.
Beverage companies use Market Segmentation to create non-alcoholic and alcoholic drink categories catering to different segments.

Target Market

Target Market signifies a strategic consumer group chosen for dedicated marketing efforts.
Health brands might select health-conscious consumers as their Target Market for supplements.

Market Segmentation

It's a strategic division of a market, aiming to identify and prioritize potential consumer bases.
Cosmetic brands use Market Segmentation to create products catering to varying age demographics.

Target Market

It is the precise consumer segment to which marketing and sales efforts are directed.
Athletic brands often choose sports enthusiasts as their Target Market for performance gear.


What is market segmentation?

It's the process of dividing a market into distinct groups with similar needs, characteristics, or behaviors who might require separate products or marketing mixes.

What are the main types of market segmentation?

Geographic, Demographic, Psychographic, and Behavioral.

How does geographic segmentation work?

It divides the market based on regions, nations, states, or cities.

Can you give an example of behavioral segmentation?

Yes, categorizing consumers based on purchase behavior, brand loyalty, or usage rate.

Why is market segmentation important?

It allows businesses to tailor their marketing efforts to specific groups, improving efficiency and increasing sales.

How is market segmentation used in product development?

By understanding different segments, businesses can design products tailored to specific needs.

Does market segmentation have any limitations?

Yes. Over-segmentation can lead to overcomplication, and not all segments are profitable.

What is demographic segmentation?

It categorizes the market based on age, gender, income, education, etc.

How is psychographic segmentation different?

It divides consumers based on lifestyle, personality, and values.

How is a target market different from a market segment?

While a market segment is a broader category of similar consumers, a target market is a specific group within that segment that a business focuses on.

How do target markets evolve?

They can change due to shifting consumer behaviors, market conditions, or emerging trends.

How do companies adjust to changing target markets?

By conducting regular market research, staying adaptable, and evolving their products or strategies.

What is a target market?

A specific group of consumers that a business aims to reach with its products or services.

Why is defining a target market crucial?

It enables businesses to concentrate their efforts, tailor their messaging, and achieve better ROI.

How do businesses select a target market?

They assess segment size, growth potential, competition, and alignment with the company's objectives.

Can a business have multiple target markets?

Yes, many businesses target multiple segments with different products or marketing strategies.

Are target markets always based on demographics?

No, they can also be based on behaviors, interests, lifestyles, or other factors.

How do businesses identify market segments?

Through market research, data analysis, and understanding consumer behaviors and needs.

What is niche marketing?

It's when a business focuses on a small, specific segment (or niche) of the market.

What role does technology play in targeting markets?

Technology allows for advanced data analytics, enabling more precise targeting and personalization.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie Carlson
Aimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.

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