In the context of the business model canvas, what do 'customer segments' refer to?

• A. The product features and benefits
• B. The groups of customers the company aims to serve
• C. The channels used to reach customers
• D. The revenue streams from customers

Answer: (B)

In the business model canvas, customer segments are the groups of customers a company aims to serve. This idea matters because different groups often have distinct needs, desires, and buying behaviors, so the business tailors its approach for each one. Recognizing segments helps shape the rest of the model—what value you offer to each group, how you reach them, the kind of relationship you maintain, and how you monetize.

For example, a streaming service might treat casual viewers, families with multiple profiles, and power users as separate segments, each requiring different pricing or features. A B2B software vendor might segment by small businesses, mid-market firms, and large enterprises, since their purchasing processes and support needs differ. The other building blocks—what you offer (features and benefits), how you reach customers (channels), and how you earn money (revenue streams)—are all connected to who those customers are, which is why identifying segments is essential.