What is Market Segmentation?

With all the time and money you put into a campaign, you may want to ensure that it has the best chance of success. Understanding what market segmentation is may give you the extra edge you need.

What is market segmentation?

Market segmentation involves dividing a market of potential customers into segments based on the key characteristics they share. Segments may group consumers based on shared traits like interests, needs, or locations. The goal is to create marketing campaigns that are specifically tailored to the expectations of customers in particular segments.

This process can improve the effectiveness of your business marketing by helping you determine who will respond similarly to a marketing action. Instead of formulating a generic campaign to appeal to a broad audience, market segmentation allows you to personalize your marketing action to satisfy the specific needs of each group. In addition, segmentation may reveal which consumers are most likely to buy a product, allowing you to determine which audiences should receive the most attention.

4 common types of market segmentation:

1. Geographic segmentation groups consumers based on their geographical location.
2. Demographic segmentation divides consumers by age, gender, income, ethnicity, and more.
3. Behavioral segmentation segments consumers based on their decision-making patterns, behavior, and product usage.
4. Psychographic segmentation divides consumers based on specific hobbies, lifestyles, or values.

After you have determined the type of market segmentation you want to implement, you need to make sure that your segments include the following characteristics to optimize the procedure’s success:

Segment characteristics

• Identifiable: Consumer types included in each market segment should be easy to identify, well-defined, and measurable.
• Accessible: Each segment must be economically and geographically accessible through promotional efforts.
• Profitable: Segments must be large enough to ensure that targeting the segment will result in profit.
• Market Responsiveness: Consumers need to be receptive to the marketing campaign in order for the effort to be worth it.

Now that you know the basics of what marketing segmentation is, you can start improving the chances of your campaigns’ success.