Market segmentation and market fragmentation work together to enable you to separate your target market from a larger market and then to determine characteristics to help you market better. I consider them two steps in the same process.
Market Segmentation Market Fragmentation
Step 1: Market Fragmentation
Market fragmentation separates the market into parts so that you can then segment your target market to reveal characteristics that effectively appeal to its members.
In other words, it enables you determine the market segments specific to your target market and fragment those segments from the larger market.
For example, if you know the age range of your target market, you can fragment that age range from all possible ages in the total market. For example, you can separate the age range of people most likely to buy your product from all ages.
Suppose you have determined that people in the 21-to-30 age range are most likely to buy your product. Knowing this age range enables you to fragment Generation Y and the Provisional Adulthood life stage from other generations and life stages.
Step 2: Market Segmentation
Knowing your target market’s generation and life stage, reveals psychographics that make your target market different from all other age ranges in the USA today.
For example, market segmentation by generations reveals that Generation Y members are brand conscious and prefer brands with a core identity based on core values. They don’t like a hard sell, but prefer word of mouth marketing. Advertising that works for them centers around their lifestyle and having fun.
Market segmentation by life stages reveals that the Provisional Adulthood life stage is a time when handling peer relationships and social life are important tasks. This is a time when peers have the greatest influence on what people buy and do.
Once you determine generation and life stage characteristics, you can then combine those characteristics with characteristics from other demographic segments like education, occupation, gender and race.
By using several market segments, you can determine characteristics shared across segments and see those most shared and important to your target market.
By using these two steps – market segmentation and market fragmentation – you can cater your marketing to appeals that will be most effective with your target market.
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Market segmentation is occasionally covered on blogs that have nothing to do with market segmentation, but the blogger relates it to the topic of the blog. Thus, resources in this post are separate blog posts where you can find additional information on market segmentation.
I found these posts by typing in market segmentation in Bloglines and looking at the posts on the first 20 pages. I also searched Google with the term “market segmentation blog”. Still, I didn’t find many posts on market segmentation. Lots of posts use the words, but few actually discuss it. But I’ll keep looking to update this. If you know a good post that I’ve missed, please let me know.
You may want to bookmark this post so you can get up-to-date posts relating to market segmentation.
This five post series on market segmentation is taken from a white paper that you can get free for registering. It covers 10 Steps in Market Segmentation: 1. Always make key accounts a segment of their own, 2. apply segmentation to smaller customers, 3. consider a firmographic segmentation, 4. look where possible for a needs based segmentation, 5. use market research to determine needs, 6. customer needs are simpler than you think, 7. consider a behavior segmentation if needs are hard to recognize, 8. use cluster analysis to group together companies with different needs, 9. in a spreadsheet code all customers and potential customers, 10. implement the segmentation.
You’ll need to scroll to the tenth article on this page (December 13, 2007) to see this article, but it’s worth the trouble. This article includes three parts: 1. It’s all in the analytics, which discusses the importance of statistics in market segmentation; 2. Make it actually work, which coves the need to keep the analytics simple enough to understand that you can implement findings; 3. Use your segmentation schemes, which covers creating marketing activities and marketing messages that work with what market segmentation reveals about the target market.
Clearbrick.com/blog Although this blogger doesn’t use the term market segmentation, he explains how to develop a description of your customers [or target markets] using a market segmentation process. His three steps include: 1. assemble a master list of customers, 2. sort your customers into logical groups, and 3. give your segments a personality.
This post doesn’t cover what I consider a generation because the blogger starts with “Digital natives of all ages who form part of Generation V.” What he means by generation V is the people who use the Internet and other digital ways of gathering information. I’d call this a lifestyle segment rather than a generation segment. Still this blogger provides good detailed information about a target market important to all Internet and many off-line businesses.
While this post is about marketing disposable cameras, it provides definitions with examples of market share, market segmentation, market size and other marketing terms.
This post discusses how racial and national origin proportions are changing in the USA and says “if you’re in business that provides products or services for certain class of audience, then you better start planning.”
This post gives a great, in-depth, overview of market segmentation, including the need for it, requirements, and a list with examples of different market segments.
This article is divided into two posts with part 1 covering the first three steps: 1. identify and name the broad market, 2. identify and make an inventory of potential customers’ needs, 3. formulate narrower markets. Part two covers the remaining four steps: 4. identify the determining dimensions, 5. name possible segment markets, 6, evaluate the behavior of market segments, 7. estimate the size of each market segment.
Blogger Matt Bailey discusses the importance of market segmentation for Internet marketers. He argues that looking at web site visitors with aggregate data results in lost sales and relationships. But the more data points that you consider, the more you will understand, and the better you can market to site visitors.
This post notes that the advertising industry is moving away from demographic and geodemographic market segmentation to more data and analysis based on media consumption behavior market segmentation.
This article by Dan Herman discusses changes happening in market segmentation that take the emphasis off individual demographics and on to behavioral characteristics, and from concentration on similarities within segments to differences.
This post discusses Facebook’s value in gathering market segmentation information about a blogger’s target market. Clark advises bloggers on how to use Facebook’s market segmentation features to promote their blogs.
Want more market segmentation resources? See my site map. And if you want to keep up with my posts, you can get weekly post summaries by completing the form below:
Posted 2-27-08: Market Segmentation:
Online Resources – Blog Posts
For this resource list of market segmentation books, I searched Amazon, Google and Clickbank, but found few except through Amazon. I will continue to add good books covering market segmentation to this page after I post it. Prices were accurate at the time of this post, but please note that Amazon prices change often.
This book uses “blue oceans” to represent untapped and potentially profitable target markets. It uses examples of large successful businesses to present the tools and framework of the authors’ unique perspective on market segmentation.
This book contains 15 case studies that demonstrate how to use segmentation to get to know target markets and how to create marketing messages that will reach them.
It covers market segmentation for business-to-business companies as well as business-to-consumer companies and provides a through list of characteristics to segment business customers. It explains how to use firmographics in B2B market segmentation similarly to how demographics are used for consumer market segmentation. It even provides a list of resources for finding firmographics for business customers. See my review at
This is my book on market segmentation. It uses a simple and quick process so small business owners can inexpensively benefit from market segmentation to produce profiles of their target markets.
This book concentrates on the lifestyle market segment and covers why customers behave as the do. It walks readers through the market segmentation process with real-life examples.
This book concentrates on the lifestyle market segment with a history traced though today’s perspective on marketing. It deals with group dynamics, purchasing influences, and specific issues of lifestyle market segmentation.
This book’s authors believe that market segmentation and target marketing are required for modern marketing techniques to work. They define market segmentation and describes criteria for effective segmentation.
This book uses market segmentation to provide needs-based segments. It discusses many organizations that have wasted billions of dollars on marketing because they didn’t do market segmentation right. See complete review here.
This is actually just a chapter of a book. Its author contends that market segmentation is necessary for businesses to effectively reach their customers and target markets. It covers several demographics.
Although market segmentation isn’t a part of the title, this book deserves a place here because the authors built their growth strategies around selecting the best customer segment for a business and developing a competitive strategy around the customer segment. They implement market segmentation from a business owner’s perspective and provide examples of other business owners who built successful businesses using customer segmentation. Read my complete review here.
This author promotes the lifestyle segment in market segmentation, but also covers emerging target markets. He challenges conventional marketing, reveals misconceptions about some consumer segments, and credits marketing blunders with failure to understand market segmentation.
This book provides a how-to guide for targeting Baby Boomers. It contends that, to be successful, more businesses should be marketing to this wealthy, aging generation, instead of spending 80 percent of their marketing resources on generation Y, whose members have far fewer resources.
This book is written for people who want to become their own boss even in a bad economy. People wanting to quit their jobs and work for themselves in more creative positions will find lots of innovative ideas in this book.
For this market segmentation resource list of Web site pages, I did a search through Google for “market segmentation” and then viewed every entry on the first five pages.
I have included only the sources that I believe provide good information. I eliminated those that:
were merely advertisements for marketing agencies,
appeared to be a duplicate of another listed page,
presented viewing problems,
provided little worthwhile information, or
were just gateways to paid information.
For your convenience, instead of linking to the title of the article, I have linked to the complete urls so you can type them from a printed copy of this resource list, or copy and paste them into your search window. Providing the full urls results in some of them expanding into the right margin.
I occasionally add new articles to this resource list so bookmark this post so you can come back and check for new listings.
This page provides a process for conducting market segmentation by neighborhoods. It is by a marketing company that provides this service.
Contextual Segmentation – The New Method for Market Segmentation
This ezine article by Dan Herman challenges traditional market segmentation, and contends that “the new eclectic consumer” is better reached by segmenting motivations and uses. He defines contextual segmentation as “segmentation according to contexts of purchasing or using/consuming,” and calls it a revolution in market segmentation.
This is an Ezine article by Luis Portiansky. This author contends that the most successful companies use market segmentation to learn about customers and potential customers (your target market). Portiansky says that “Businesses that segment their target markets and act on the information collected are more likely to succeed and profit than those who do not.”
This article discuses the most important market segments for segmenting Hispanics. These include country of origin, language preference, generation, place of residence, socio-cultural level, acculturation, assimilation, and income level.
This Wikepedia page covers market segmentation as it applies to categorizing industrial and business customers. It’s an in depth article with illustrations.
This page provides some good information about market segmentation, mostly in a list format. I particularly like the list of benefits listed under “Segmentation of Needs.”
This is another page by a marketing company that provides market segmentation services, but it does provide a definition of market segmentation and a customer’s view of it.
This is the first of three lessons based upon marketing segmentation and target marketing. It notes that market segmentation is a form of critical evaluation and provides several questions to determine market segmentation criteria.
The definition of market segmentation isn’t consistent across the industry. For instance, my definition of market segmentation and many related terms slightly differ from many marketers. So I start this post with the following two explanations and then provide a list of terms.
Some Market Segmentation Definitions Are Confounded
Market Segmentation Needs Operational Definitions
Some Market Segmentation
Definitions Are Confounded
Some market segmentation terms are confusing and, what we researchers call, confounded. A confounded term is one that represents two different concepts.
The problem with confounded terms is that you never know which concept is being referred to when another person uses a term like market segmentation. This makes for unclear communications and increases the chance of misunderstandings. When conducting research of any kind, it’s necessary to define a term like market segmentation to consistently refer to one and only one concept.
Market Segmentation
Needs Operational Definitions
In all research, it’s necessary to use operational definitions. Operational definitions are measurable and clearly delineate terms.
I define some research terms like “variables” and “levels of variables” here because understanding the research terms aids your understanding of market segmentation terms, and why I define terms related to market segmentation as I do.
I also define a few marketing terms, not specific to market segmentation, but used in posts in this blog.
I cover the terms alphabetically. That is not the most logical way to think of the terms, but it does provide the most efficient way for you to use this list of market segmentation definitions as a reference. This organizational choice may sometimes require that you read other definitions in order to fully understand one definition. In such cases, the other definitions are italized within the one definition that is bolded.
Market Segmentation Terms
Demographics: What I frequently refer to as demographic characteristics are variables based on factual information about subjects. These include age, income level, type of occupation, level of education, gender, national origin, race, etc.
Generalize: This is the ability to extend findings from a group of test subjects to a larger population. Certain statistical requirements are necessary to generalize.
Levels of Variables: Because variables are measurable, the concepts measured by them can have different ranges of values. In order to research the influence of different levels of variables on subjects, every level of a variable has to be distinct from every other level. No test subject can be in more than one level of a variable and every subject has to be in at least one level of a variable.
Market fragmentation: Market fragmentation represents a way of separating the people most likely to buy what you sell from the market at large.
Market segment: Although many marketers define a market segment to mean the people most likely to buy what you sell or the part of the market that you are targeting. I believe this is confusing because that is also called a target market. I separate these terms and define a market segment, in research terms, as a level of a variable. For example, there are four levels of adult generations in the USA today. Generations is a variable. Each of the four generations is a level of that variable.
Market segmentation: Many marketers define the concept that I call market fragmentation as a part of market segmentation, but I distinguish these terms and define market segmentation as the process of organizing subjects into levels of variables in order to generalize about them and their behaviors.
Market segmentation research: I use this term to define all research involved in market fragmentation and market segmentation.
Market segmentation theory: This is the theory that people differ by demographic, psychographic, sociographic variables and that their buying behavior and successful marketing appeals relate to those variables.
Marketing strategy: A marketing strategy is a plan for reaching marketing goals or objectives.
Marketing tactics: Marketing tactics are specific actions to be taken in order to implement a marketing strategy.
Matrix market segmentation process: This is my process of determining the best appeals for a target market by selecting its appropriate market segments, tabling the characteristics for each segment and looking for repeated characteristics across segments to predict successful marketing appeals.
Primary research: This is research designed and conducted to answer a specific question or to test a specific hypothesis. For example, a researcher may test two marketing messages with a target market to determine which one makes the most sales.
Psychographics: What I frequently refer to as psychographic characteristics refer to personality variables that often relate to demographics of subjects.
Relate: I use this term to indicate that two variables are associated in some way. This does not indicate a cause-and-effect relationship, when one variable causes a change in another. Neither does it indicate a correlation relationship between variables, negatively (as one increases the other decreases) or positively (as one increases or decreases so does the other).
Reciprocal relationships: The best marketing relationships are reciprocal or mutually beneficial. Both the marketer and the target market members benefit. For example, you need to market better, I’m trying to build a business. If you buy my e-book or other information products on marketing, you learn to improve your marketing while I build my business sales. We both benefit.
Secondary research: This is research that reviews, synthesizes, and sometimes evaluates other research that has been conducted usually by other researchers to gather information related to a specific question or hypothesis. Most market segmentation research is built upon secondary research.
Sociographics: What I frequently refer to as sociographic characteristics refer to sociological variables that often relate to demographics of subjects.
Subjects: In research terms, subjects are what a test manipulates. In market segmentation, subjects are people who buy and are, thus, in a market.
Target Market: The people most likely to buy what you sell (potential customers), identified by demographics, psychographics, sociographics and behavioral characteristics so they can be separated or fragmented from the market as a whole, and marketed to according to their characteristics.
Variable: A variable is a measurable concept that affects changes in a subject. In the case of market segmentation, subjects are people who buy, and variables are characteristics that cause these people to make different buying decisions and to be receptive to different appeals.
These definitions should help you as you read my blogs and other information about market segmentation. I provide lists with links to web pages on market segmentation at Web Pages Covering Market Segmentation.
You can get my ebook – Know’em, Sell ‘em: Discover The Best Appeals For Your Target Market. Just click the art in the upper left corner.
You can learn more about my matrix market segmentation process and assure that you never miss one of my posts by completing the form below:
Posted 2-25-08: Definition of
Market Segmentation
And Related Terms
Linda holds a Doctorate in Education (Ed.D.) and is accredited in Public Relations (APR). She has practiced marketing, public relations and communication skills for over 30 years. She is President of Best Books Plus, Inc., an online and off line publishing company.
Posted 2-29-08: 
(International Series in Quantitative Marketing) by Michel Wedel and Wagner A. Kamakura (Hardcover – Dec 31, 2000)
(Digital – Jan 5, 2008) – Download: PDF
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