Differentiate between differentiation and segmentation?

1 year ago

It is important to distinguish between these two terms which are commonly confused in practice. When the company looks for differentiation, it develops a series of activities competitor-oriented and this differentiation may be, for example, at tangible attribute level or at service or intangible attributes that have product value level.

When the company segments, it takes the heterogeneous market and partitions it in smaller units (segments), which are the aim for its strategy. This division is made by considering one or more consumers’ features: demographic (sex, age, etc.), socio­economic (social status, employment, purchasing power, etc.) or behavioural (loyalty and purchase frequency, etc.).

In the case of industrial use products, there may be a different segmentation criteria according to: company size and/or order, industrial sector, as well as other factors like technological development, product use, organization structure, and financial solvency. As a result, segmentation consists in entrepreneurial actions consumer or user oriented.

Susmita Sah
Jan 17, 2022
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