Hi there,

This is indeed an interesting question which is probably relevant for quite a lot of users, so I am happy to provide my perspective on it:

• Generally speaking, market segmentation and customer segmentation are two different operations.
  • With market segmentation, you think about meaningful ways how to cluster the market into segments, e.g. by regions, business units, channels. You might as well cluster the market by customer types yet this would mean you segment the whole market (not solely your customer base), e.g. clustering the aviation market into segments of business travelers and leasure travelers.
  • With customer segmentation, you think about meaningful ways how to cluster your customer base, e.g. by income, age, gender.
• Regarding your second question, I would advise you to do neither. Unless there is any inherent need for it, there is no need to segment any information provided. Moreover, when analyzing market size and growth, the interviewer will most probably inform you about the way to think about this specific industry. Lastly, I would advise you to solely assess the market attractiveness if you have doubts. In a market entry case, the interviewer eventually wants you to assess the attractiveness of the market entry, not the attractiveness of the market in general.

In case you want a more detailed discussion on how to best approach any type of case study questions, please feel free to contact me directly.

I hope this helps,

Hagen

Market segmentation can be any segmentation relevant for the market: it can be based on customers, geographies, product categories, channels, etc. So customer segments is just one of the options.

Regarding the second question, you can ask about relevant segmentation in the first bucker. On the customer analysis, you can ask about customer preferences, key purchase criteria, etc. - if you are breaking down the market into customer segments, assessing their size, growth, profitability, etc., it should be done on the first bucket… 

So the market analysis should be about whether the market is attractive, or which segments are attractive.

The customer analysis, in general, should be about how to win the customer (or market) segments you identified in the market analysis and decided to target.

Hi there,

The easiest way to think about it is that customer segmentation is a subset of market segmentation.

By its very name, market segmentation is segmenting the market. This can be by competitor, geography, sub-product, customer etc.

Customer segmentation is about figuring out what are the customer groups in the market and identifying trends/habits (WTP, preferences, size, etc.)