MARKET SEGMENTATION — APPLYING A MARKETING CONCEPT TO COMMERCIAL REAL ESTATE DEVELOPMENT Available to Purchase

Market segmentation, the dividing of a market into distinct subsets of customers, is a conceptual approach that commercial real estate developers can use to identify unmet needs. By developing properties for which there is an unmet need instead of those that are already adequately supplied, the developer achieves a temporary monopoly. To accomplish this, the market area must be defined, an inventory of existing space must be made and the demand for particular types of space must be estimated. The office space market and the retail space market are used to illustrate the process of identifying the type and size of building that should be built as well as determining when it should be built.