Market Segment vs Target Market: What Are the Differences?

Market Segment vs Target Market: What Are the Differences?

Running a small business comes with a lot of risks. Approximately 33 percent of small businesses close within the first two years. One of the best ways to avoid this is to ensure that you’re making the most out of your marketing campaigns. 

A lot of marketing materials discuss market segment vs target market. If you’re not a marketing genius, understanding the difference might not come naturally to you. Read on to learn all about the key differences between these two important marketing terms and how you can use them to your advantage.

What Is A Market Segment?

A market segment is a portion of the overall market with a similar feature or buying habit. Different businesses look for different market segments when they form their marketing campaigns. This is incredibly important because it’s not possible to meet the needs of all consumers, but you can meet the needs of specific consumers.

Take a grocery store, for example. They might want to market to people who are health conscious or on a budget. Identifying a market segment allows a business to create marketing materials and products that suit their needs. 

Market Segmentation In Action

In order to arrive at a market segment, you have to go through the process of market segmentation. This means taking the whole market and breaking it down into defined parts. The following are the most common ways that marketing professionals segment the market.


Geography plays a role in consumer interests and shopping habits. People in southern California have radically different purchasing habits than those living in northern Minnesota. Factors that play into these differences include climate, population densities, and general values. 


The most common way that businesses segment the market is based on individual demographics. This can be based on any number of things including age, gender, income, and race. Businesses might segment the market based on a number of different demographics, like high-income women over 30. 


Behavioral market segmentation is a little more complicated. This is because it involves less concrete factors. Instead of looking for people in a certain place or a certain age, businesses look for how people interact with products. 

For example, a business might be interested in getting the attention of brand-loyal consumers or consumers who have purchased from their business in the past. 


Psychographic market segmentation involves identifying specific lifestyles, values, and opinions specific consumers have. It’s all about how a consumer lives their life. For example, a business might want to target consumers who are eco-friendly or like to shop locally. 

What Is A Target Market?

Once the market is segmented, a business takes those market segments to create a target market. A target market is the group of people that a business serves with its products and services. This means creating products that fit the needs of that market and also advertising campaigns that’ll grab their attention. 

A business doesn’t have to serve a single target market, though some do. Stores like Target and Walmart sell products for a number of different people, which means that their ad campaigns must appeal to a wide variety of consumers.

Stores like Sephora, on the other hand, have a narrower target market. The products they sell and their ad campaigns only need to appeal to those people.

What’s The Difference?

On the face of things, the terms target market and market segment sound rather similar. Many businesses opt to use a digital marketing agency because of the complexity of their differences. There are some ways to nail down the differences in their definitions, though. 

Process Differences

Both target marketing and marketing segmentation are marketing processes. The biggest difference between them is when they occur.

Market segmentation always takes place before target marketing begins. It is done on a company or marketing agency level once the overall market of a company has been identified. After the completion of marketing segmentation, target marketing occurs. 

Marketing professionals take those different market segments and combine them to create a specific target market. From there, businesses create marketing campaigns directed at their target markets. 


Market segmentation and target marketing have two entirely different purposes.

The purpose of market segmentation is to identify different types of customers and divide the market into different groups. Marketing agencies identify products they buy and the type of advertising to which they respond. 

The purpose of target marketing is to create specific marketing campaigns that grab the attention of consumers in certain market segments. This involves knowing their preferences and buying habits. 


The final major difference between market segmentation and target marketing is their scope. 

Market segmentation deals with the entire market. Professionals take every possible consumer and divide them up into different segments. 

Target marketing is limited in its scope. It only applies to certain market segments. Some businesses have larger target markets than others, but they all have a smaller scope than the entire market. 

Understanding Market Segment Vs Target Market Is Key

Trying to sort out the meanings of market segment vs target market might sound complicated, but it’s quite easy to distinguish between the two. Market segment refers to the identity of a consumer, while target market refers to who you want to notice your business. With this knowledge in hand, you can craft a killer marketing campaign for your business!

Do you want to learn more awesome ways to take your small business’s marketing campaigns to the next level? Be sure to peruse our blog for tons of helpful tips you can put into action!

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