A variation of organising by product where sets of customers are defined with similar characteristics and needs.

Organisations are structured to support each customer segment with fully-integrated unit(s).

Advantages

• Increases market knowledge across the organisation   -Increases customer-focus
• Creates capability to respond quickly to markets
• Creates one-stop shopping for customers interested in a “family” of related products and services
• Enriches jobs and individual responsibilities
• Increases ability to forecast and track customer retention and/or satisfaction

 

Disadvantages

• Creates duplication of some business activities
• Creates more cost