What are the disadvantages of market segmentation?market segmentation

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pohnpei397 eNotes educator| Certified Educator

Market segmentation is the process of breaking a market into segments and marketing a product in different ways to those different segments.  It can also include coming up with different products to sell to the different segments.  Market segmentation is usually seen as a good thing because it allows firms to tailor their products and/or marketing approaches so as to do the best job of appealing to each segment.

However, market segmentation can have drawbacks.  The two most important examples are

  • It can be costly to identify all the different segments and then to spend the money to create different products and/or marketing schemes for each.
  • It can make it harder for the company to reach out to a broad range of consumers.  If the firm only makes products that appeal to small niches, it will be hard for it to become a widely-known and well-liked company across the whole population of consumers.  It might remain a small company, appealing only to small groups of consumers.