'Market' definition examples

As the correct definition of the market to be segmented is essential, the following is designed to help you develop a clearer understanding of the 'customer need' being segmented. If necessary, you can then refine the definition to ensure that the scope of your segmentation project is more meaningful to your company in terms of its capabilities.

Which of the following is a market definition?

  1. The pensions market:
    No; simply on the grounds that it is describing a product, a product designed to satisfy a need, and there are other products that can also satisfy this need. Try and describe what it is most people are attempting to achieve when considering whether or not to invest in a pension. More often than not, they are attempting to secure a desired standard of living for when they retire. This can be achieved in a number of ways; for example, stocks and shares, savings schemes and investing in property are just a few in addition to pensions that can help achieve that particular customer goal.

  2. The conveyance of individuals over long distances:
    Understanding a customer need in these terms would have probably enabled the major shipping companies of the nineteenth and twentieth centuries to be the dominant airlines of today, but they preferred to see themselves as shipping companies. Many of today's airline companies also prefer to see themselves as 'airlines', but how many passengers would switch to the teleporter if, and when, it ever came into being? Beam me up Scotty! A market definition? Yes or No?

  3. The ball bearings market:
    Another product description. If you were to ask customers what they were looking for and attempted to capture it by completing the sentence 'the customer need is to . . . . . ' the sentence could well be completed by adding, '. . . support rotation'. Ball bearings are therefore competing against other products and technologies that also support rotation, such as magnetic levitation. Rather than the manufacturers thinking about improving their ball bearings, it would be better for them to think about how to improve methods of supporting rotation, because it is this particular functionality that customers are seeking to achieve from their purchase.

  4. To verbally communicate remotely and in real time with anyone I choose:
    Yes or No? It may benefit from adding 'whenever I choose'.

  5. Portable sources of energy for powering equipment:
    Yes or No? It could be improved by refining it as there are clear differences between a consumer market and an industrial market, not only in the energy capacity being sought but also in the appropriate distribution channels.

  6. The luxury chocolate market:
    Yes or No? Probably better thought of as the 'treat' market for some purchasing motivations, which is attractively insensitive to price!

  7. The market for central heating:
    Yes or No? What the customer is really looking for is a means of maintaining an ambient temperature of their choosing.

  8. To convey documents from 'A' to 'B' with certainty and speed:
    Yes or No? A company that excelled in meeting this particular need eventually became a verb linked to the market, namely FedEx (Federal Express).

  9. The air freight market: Yes or No?
    This is too product focused:
    What the customer really cares about is having their goods delivered to where they want within their time-frame constraints.

  10. To have access to a variety of experiences out of the ordinary:
    Suggested as the market definition for theme parks, before the imagination starts to run away with itself!

Now try it for your own business and arrive at a market definition. It could well be that your company in fact operates in a number of markets. It may also be the case that some of your products compete in more than one market.

Further help in defining the market to be segmented can be found in Chapter 4 of Market Segmentation: How to do it and how to profit from it (2012 edition published by John Wiley & Sons, ISBN 978-1-1184-3267-9).