When working with clients to develop their brand strategies, we frequently encounter the terms Industry, Sector and Market. But what is the real difference between an industry, sector and a market? We explain.
What is the difference between an industry, a sector and a market?
You’re not the only one confused
It’s easy to assume that they are more or less the same, or perhaps slightly different ways of saying the same thing. I carried out some research, and it’s safe to say that a lot of people are confused – including some well-known universities, it seems. The truth is, they each have a very different meaning.
A little diagram to help explain
The world of business and commerce is divided up into a selection of broad and commonly recognised groups, called sectors. Often a more general term, a sector represents a group of industries and markets that share common attributes. Each sector has unique characteristics and a different profile, often found in share dealing.
Examples: Financial, Public Sector, Service, Healthcare, Energy, Communications, Technology, Agriculture
The term ‘industry’ can be explained as any general business activity or commercial enterprise that can be isolated from others, such as the tourist industry or the entertainment industry. An industry is frequently named after its primary product, for example, the Banking industry. For statistical purposes, industries are categorised generally according to a uniform classification code such as Standard Industrial Classification (SIC).
Examples: Banking, Insurance, Renewables, Manufacturing, Aerospace, Clothing, Cosmetics, Electronics, Creative
A market is a group (or groups) of customers who require the products and services provided by an industry. Typically a market refers to the whole available market for an industry. Markets can be divided further by a process called market segmentation, where the whole available market is divided into smaller groups, called segments. It can be done in a range of different ways, using different segmentation variables, like age, lifestyle, education, job role, income, beliefs, location or any combination – there are lots! In terms of marketing, each segment is likely to need tailored communications and messages; for example, a customer in their 20’s often has very different needs to one in their 70’s.
Examples: For banking, the market would be all those customers requiring banking services, like first-time buyers needing a mortgage, a family looking for a car loan, or business leaders looking for financing.
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