What is “Market Segmentation”?

Market segmentation is a marketing and business strategy that involves categorizing a broader audience into distinct groups based on factors like demographics, interests, behaviors, or location. Each segment represents a specific customer profile, allowing businesses to tailor their messaging, products, and services more effectively.

By understanding and targeting the unique needs of each segment, companies can improve customer satisfaction, marketing efficiency, and overall business performance.

Example

“Our campaign targets three key segments: urban professionals, eco-conscious families, and Gen Z students interested in budget travel.”

How is “Market Segmentation” used in business?

In business, market segmentation is used to refine marketing efforts, personalize communications, and develop offerings that resonate with each group. It helps businesses allocate resources more effectively and gain a competitive edge by addressing specific consumer needs rather than a one-size-fits-all approach.

Pro Tip

Start with basic segmentation (like age or location) and gradually refine using customer data, purchase behavior, and feedback for better results.

Related Terms

Target audience, customer persona, niche marketing, demographic analysis