What Is the Role of Market Segments in Marketing Strategies?

Marketing investigates what potential customers need and develops products and services to satisfy those needs. Marketing strategies put this concept into effect for specific companies and target markets. Companies that implement marketing strategies find that different customers have different needs. To address this problem, they group similar consumers into market segments and focus on their common needs. Such marketing strategies are only effective if they use market segments with the appropriate characteristics, allowing the companies to target the segments with products and services tailored to their specific needs.


A market segment characteristic that plays a key role in marketing strategies is accessibility. Market segments on the other side of the country are not accessible to a bakery whose marketing strategy emphasizes freshly-baked, locally produced goods. The bakery has to focus on local markets and segment them according to local preferences and needs. If the bakery produced packaged goods with a strategic emphasis on organic ingredients and taste, remote markets would become accessible.

Identifiable Characteristics

A key requirement for market segmentation is that companies have to be able to identify the characteristics that form the basis of commonality in a segment. Groups of consumers may have common preferences and needs but, unless they share these with the company, a marketing strategy targeting these segments will fail since the company has not identified the characteristics it wants to target. Customer surveys or an evaluation of customer behavior are ways of identifying such characteristics.

Substantial Characteristics

Market segmentation has to be based on characteristics that are important for the consumers. If a characteristic is negligible, a marketing strategy based on it will not motivate potential customers in a market segment to buy the product or service. An insubstantial characteristic results in a weak motivation. Market segmentation based on strong consumer needs plays an essential role in marketing. Such segmentation together with marketing strategies that address these needs are effective tools for achieving a company’s marketing goals.


A key market segmentation characteristic is the potential customer’s ability and willingness to pay for a product or service. Company marketing strategies have to target their high-priced goods to high-income market segments and compete on price in low-income segments. The division of markets into segments with common income levels plays a major role in marketing strategies that develop and implement pricing as a competitive advantage. A market segment’s income level can determine the marketing mix a company promotes there.

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