Conducting a feasibility study before you set up a business is essential to determine the profitability of the venture. One crucial part of a feasibility study is the market segmentation chapter of the report. Market segmentation indicates the division of the whole market chunk into different criteria such as gender, age, preferences and financial status. Knowing which area of the segmented market to target is valuable to the effectiveness and profitability of the new business.

Focusing on one part of the segmented market is relatively easier than trying to satisfy the whole chunk. Concentrating all business efforts to quench the needs and desires of a small group is a good way of having a continuous source of customers. Having a good number of customers is a proof that the business can exist further as time goes by.

After having satisfied the demands of a specific market segment, the business can begin analyzing other areas of the segmented market whose needs, the business can address. If the business aims to target a new part of the segmented market, this will require a different set of plans and tactics compared that the one the business has employed in its previous undertakings. More extensive research should be done to ensure the accuracy of the basis for new business venture.