What is the difference between market segmentation analysis and strategic group analysis?

Market segmentation is a concept widely used in business marketing. This concept refers to the division or segmentation of the consumer market. The consumer market is divided into segments so that marketers can make segment specific strategies which would ensure the efficient utilization of business resources. Market segmentation also help businesses devise price strategies. For example if a market segmentation analysis is carried out keeping in view the economic class segmentation, the prices of the product would be reflective of that. A business might have to lower their prices that what they had anticipated due to the fact that they are targeting a low income market segment.

Strategic group analysis is a form of categorizing different businesses based on some strategically important properties (Fleisher & Bensoussan, 2003). Some of the properties that could be used for strategic group analysis are the similar business models, similar business strategies, similar business size, same geographical location, and same customer base and so on.

Both strategic group analysis and market segmentation analysis are the grouping of different things. One is the grouping of consumers based on shared values and the other is the grouping of businesses based on shared characteristics.