Segmentation is about differentiating. As we can see in Chart 1.1, there are differences. Segmentation is about realizing that not all customers and products are the same. At the same time, there are still some common characteristics that allow a certain level of process standardization. In the rare case where we have one product with one supplier and one
customer, segmentation is meaningless. But as soon as we add a second customer to the mix, we find that the two customers expect to be supported differently. The difference could be a location difference, where one is further away than the other is. Or, it could be a timing difference, where the delivery to one customer is more critical than the other. Or, possibly a quality requirement difference. Or, it could be a personality difference making us more compatible with one customer than the other. And the potential differences go on and on. The result is that we manage our two customers differently. We treat them differently. We respond differently to their requests.