Market Segmentation

The process of dividing a target market into smaller, more defined categories. It segments customers and audiences into groups that share similar characteristics, such as demographics, interests, needs, or location.

Why

The information about potential target markets and customer segments helps to identify the pros/cons and personalize the marketing campaigns accordingly. It helps marketers to be efficient and minimize the risk of unsuccessful and ineffective marketing campaigns.

How

The four types of market segmentations.

  • Demographic segmentation
    • Demographic segmentation is one of the most popular and commonly used types of market segmentation. It refers to statistical data about a group of people. E.g., Age, Gender, Income, Location
  • Psychographic segmentation
    • Psychographic segmentation categorizes audiences and customers by factors that relate to their personalities and characteristics. E.g., Personal traits, Values, Attitudes, Interests, Lifestyle
  • Behavioral segmentation
    • Behavioral segmentation focuses on how the customer acts. E.g., Purchasing habits, Spending habits, User status
  • Geographic segmentation
    • Geographic segmentation is the simplest type of market segmentation. It categorizes customers based on geographic borders. E.g., Country, City, Urban/Rural

References