Market Segment

Loading the player...

What is a 'Market Segment'

A group of people that share one or more characteristics. Each market segment is unique and marketing managers decide on various criteria to create their target market(s). They may approach each segment differently, after fully understanding the needs, lifestyles, demographics and personality of the target. To meet the most basic criteria of a market segment, three characteristics must be present:

  1. Homogeneity (common needs within segment)
  2. Distinction (unique from other groups)
  3. Reaction (similar response to market)

BREAKING DOWN 'Market Segment'

Examples of common characteristics are: interests, lifestyle, age, gender, etc. Common types of market segmentation include: geographic, demographic, psychographic and behavioral.

RELATED TERMS
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective ...
  2. Business Segment Reporting

    Giving separate accounts of a company's individual divisions, ...
  3. Segment

    A component of a business that is or will generate revenues and ...
  4. Demographics

    Studies of a population based on factors such as age, race, sex, ...
  5. Intersegment Sales

    The transfer or exchange of goods for monetary compensation from ...
  6. Activities, Interests And Opinions ...

    A person's characteristics used by market researchers to construct ...
Related Articles
  1. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  2. Investing

    Money Market

    Learn more about this segment of the financial market and how it can cater to your short-term investment needs.
  3. Economics

    Explaining Demographics

    Demographics is the study and categorization of people based on factors such as income level, education, gender, race, age, and employment.
  4. Economics

    How Changing Demographics Affects U.S Elections

    With the 2016 election upcoming, the change in two of the country's largest demographics will go a long way in determining who controls the White House.
  5. Active Trading

    The Importance Of Segment Data

    Key financials often fail to provide insight into large cap companies.
  6. Stock Analysis

    Apple's 5 Most Profitable Lines of Business (AAPL)

    Learn about how Apple generates its profits. It breaks its results by geographic region, with all showing year-over-year improvement.
  7. Investing

    An Introduction To Exchange-Traded Funds (ETFs)

    Exchange-traded funds (ETFs) offer investors the ability to diversify over an entire sector or market segment in a single investment. Find out how they are created and what they can do for your ...
  8. Retirement

    Generational Marketing: Harvest The Whole Family Tree

    Attract new clients by tailoring your message to specific age groups.
  9. Entrepreneurship

    How To Determine Your Business' Target Market

    Given that the U.S. has seen its prosperity ranking slip during 2012, this article looks at the importance of defining a target market and how best to achieve this.
  10. Stock Analysis

    After Tripling, This Blue-Chip Stock Is Still My Top Bull-Market Pick

    Despite its pullback Friday, the S&P 500 continues marching to new all-time highs and is just a stone's throw away from the psychologically significant 2,000 level. In this positive market ...
RELATED FAQS
  1. What are key factors that are generally considered in demographic studies conducted ...

    Understand the importance of demographic research and learn key demographic factors that a company seeks to discover through ... Read Answer >>
  2. What are some examples of businesses that use market segmentation?

    Find out what types of businesses use market segmentation and how this strategy helps companies market their products more ... Read Answer >>
  3. How might a company use demographics to assess the size of a potential market?

    Discover how a company can utilize the examination of different demographic characteristics to identify and assess the size ... Read Answer >>
  4. What category of retailers will perform most strongly when the economy is doing well?

    Learn why volatile market segments such as automotive and building supplies tend to perform the best among the retail sector ... Read Answer >>
  5. What is the difference between an industry and a sector?

    The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment ... Read Answer >>
  6. What options strategies are best suited for investing in the chemicals sector?

    Understand why different options strategies yield more auspicious results for investors in the chemicals sector, depending ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center