5 Requirements For An Effective Market Segmentation

Requirements For Market Segmentation

Market segmentation is the process of dividing a complex market into different simpler markets which a company can easily understand and apply its marketing efforts. There are certain requirements or criteria that define market segmentation effectiveness.

The following are the five requirements that need to be fulfilled in order to make market segmentation effective. They are:

Differences in Customer’s Response

A market consists of different consumer groups and each group holds some common characteristics. Each of the customer groups should respond differently to the same marketing strategy.

For example, you identified the two market segments and applied your marketing efforts and both segments responded the same. That means they are not two segments, but a single market segment.

The differences customers show in their response is the opportunity for businesses to present their different strategies to different customer groups.


The data of customers should be measurable which may be the number of customers, the number of segments, needs, and other characteristics.

The customer’s response based on the quantifiable information can be easily measured whereas their feelings, personality, and attitudes can not be measured.

Related: Process of Market Segmentation

However, you should do your best to gather the customer’s data and make a profile. When there is a lot of information about the customers, it becomes possible to design and launch effective marketing campaigns.

Large Size

This requirement of market segmentation is also commonly known as substantial. Market segmentation is a time-consuming and expensive process.

When your company focuses on only one or a very small market segment it may effectively respond to the customers, but such a small segment does not provide huge benefits. Investing in such small segments results in a company’s loss.

Thus, it is necessary that the market size must be large enough, and when companies choose the segments there is a possibility of huge profit potential.


Accessibility, here means the customers or target markets you choose should be reachable. Your company’s products should be easily reachable to the customers.

When you choose a market that is far away from your company’s ability to reach there, then this is not your effective market segmentation.

Thus, the market should be easily accessible. The company should easily access the market and provide service within its resources, available channels, marketing institutions, and sales personnel.


Last but not least, the market should be stable. Meaning that, when you segment your target market, the market needs to be stable for a certain period of time.

A market that needs, want, value, preference, desire, etc. continuously changes over time, such a market can not be reliable. Reliability and stability of the market are necessary that determine whether or not the market is competent to buy the products.

A market must be stable for mainly two reasons – when you employ marketing strategies it takes some time to achieve its objective and the stability of the market provides brands required time to recover the investment made in the market segmentation.

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