Market segmentation has some limitations. Market segmentation is when a company divides the population based on certain factors such as geography, age, and income levels. One disadvantage of this strategy is that the segment that may be chosen may be too small to sell enough products to make a profit. A second disadvantage is that the consumers in the market segment could be misinterpreted. Market research may indicate that the population wants a certain product, but it may not take into consideration that there may be different kinds of that product.
There are other limitations that also exist. Businesses must determine the cost of targeting a population. Businesses also need to know how much competition already exists in that market. If there is a lot of competition, adding one more product may not be successful or worthwhile. The business must be sure that the consumers know what they want. If the consumers are confused or uncertain, that could be problematic. Finally, there will be no market research for new products. The business will constantly have to monitor how the product is doing by marketing it to the masses and adjusting as needed.