Difference between market segments and customer segments

Recent activity on Mar 02, 2019
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Anonymous A asked on Feb 28, 2019

What are the differences between market segments and customer segments? Can information about customer segments give you something extra if you already know the market segments?

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replied on Mar 02, 2019
#1 Expert for Coaching Sessions (3.700+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi Anonymous,

I agree with Vlad, since a market can be divided in different products, customers and distribution channels, customer segments – that is, segments defined as for a particular characteristic of the customers such as age or income – are just one way you could segment a market. From your question, it seems you are considering instead market segments as product segments, which are another way to segment the market.

Customer segments are usually an important element for an industry analysis, I would thus recommend you include them in your approach.



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updated an answer on Feb 28, 2019
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Market segments are a way of splitting up the market in the relevant segment (which differ per industry). So for example in the automotive industry you might split it up by car-type: small, medium, sedan, SUV,..

Customer segments focus on the specific characteristics of customers, which could be age, income etc..

For this example, you can use market and customer segments to better understand what it going on vs if you would focus on the general trends. Looking at the SUV sales for each age bucket can reveal important trends (e.g. SUVs are becoming more popular under 21-30 year olds).

Hope this helps!


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Content Creator
replied on Feb 28, 2019
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School


Customer segmentation is just one of the ways to segment the market. E.g. in corp banking you have large, medium, small customers by size. But you can also segment the corporate banking market by geography.


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Francesco gave the best answer


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