Hollensen (2015): 291 

Kotler and Keller, (2013)  

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes. 

Armstrong, Kotler & Opresnik, (2017: 198) 

A market segment consists of a group of customers who share a similar set of needs and wants.

Kotler and Keller, (2013: 214)   

A niche is a more narrowly defined customer group seeking a distinctive mix of benefits within a segment. Marketers usually identify niches by dividing a segment into subsegments.  

Kotler and Keller, (2013: 214) 

Market targeting (or targeting) consists of evaluating each market segment’s attractiveness and selecting one or more market segments to enter.

Kotler and Armstrong, (2012:190) 

Differentiation involves differentiating the firm’s market offering to create superior customer value.  

Kotler and Armstrong, (2012: 190)

Positioning consists of arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Kotler and Armstrong, (2012: 190) 

Armstrong, Kotler & Opresnik, 2017: 198 

Two broad groups of variables to segment consumer markets. 

Segmentation based on descriptive characteristics: geographic, demographic, and psychographic. 

Then examine whether these customer segments exhibit different needs or product responses. 

Kotler and Keller, 2013:  214 

Segmentation based an behavioral considerations, such as consumer responses to benefits, usage occasions, or brands. 

Then find out whether different characteristics are associated with each consumer-response segment.  

Kotler and Keller, 2013:  214 

A priori (meaning "from the beginning" in Latin) segmentation is a market segmentation method that relies on pre-determined characteristics to group customers. 

Essentially, you decide on the criteria for segmentation beforehand, then use existing data to categorize your audience.

Key Features:

• Uses pre-existing or observable customer data for segmentation.

• Relatively inexpensive and easy to implement compared to other methods.

• Works well when the segmentation criteria are well-defined and directly linked to customer behavior or purchasing decisions.

The resulting segments are mostly descriptive.

Source: https://g.co/gemini/share/f1456190d36e

Post-hoc segmentation, also known as exploratory segmentation, takes the opposite approach of a priori segmentation. 

Instead of defining the segmentation criteria beforehand, it uses data analysis techniques to uncover natural groupings within your customer base.

Key Features:

• Relies on data analysis to identify distinct customer segments based on their characteristics and behaviors.

• Often uses statistical techniques like cluster analysis to group customers with similar attributes.

• Uncovers hidden patterns and segments that might not be readily apparent with pre-defined criteria.

The resulting segments are mostly predictive.

Source: https://g.co/gemini/share/b0c15a66b956

Hybrid/nested segmentation (initially developed for industrial segmentation and widely applied in international/global marketing) suggests a two-step segmentation: the a-priori segmentation based on more generic variables is done in the first step followed by the second phase of segmentation where a-priori segments are further clustered based on other variables. 

(Wind 1978; Wedel and Kamakura 2000). 

Post-hoc and Hybrid Segmentation Procedure 

Segmentation criteria (consumer markets)

Segmenting Business Markets 

Macro-variables 

● Industry: e.g. agriculture, mining, construction, manufacturing, reselling, finance, services.

● Organizational characteristics: e.g. size, plant characteristics, location, economic factors,

customers’ industry, competitive forces, purchasing factors.

● End use markets: e.g. manufacturers of end products, commercial contractors, wholesalers

and retailers, banks and other financial institutions.

● Product application: e.g. components in specific end products, consumer home or recreational usage, resale, production line or productivity.

Micro-variables 

● Organizational variables: e.g. purchasing stage, customer experience stage, customer interaction needs, product innovativeness, organizational capabilities.

● Purchase situation variables: e.g. inventory requirements, purchase importance, purchasing policies, purchasing criteria, structure of the buying centre.

● Individual variables: e.g. personal characteristics, power structure

Segmenting Business Markets - Another approach

Segmenting International Markets 

Framework of segment attractiveness criteria 

Effective Segmentation Criteria 

Measurable. The size, purchasing power, and characteristics of the segments can be measured. 

Substantial. The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program.   

Accessible. The segments can be effectively reached and served. 

Differentiable. The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs.  

Actionable. Effective programs can be formulated for attracting and serving the segments. 

Kotler and Keller, (2019)

Segmentation and ethics