What is Market Segmentation?

Market segmentation is a marketing strategy used to divide customers into smaller groups based on their specific characteristics. It can help marketers target their advertising more effectively and efficiently.


It allows businesses to develop strategies aimed at each customer group, which can increase customer loyalty and retention. This also makes it easier to track a campaign’s success.


Market segmentation is the process of dividing a market into groups of potential customers based on specific criteria. Common demographic factors include age, sex, income, education, and life-cycle stage (family status).

Demographic segmentation is used by marketers to develop targeted marketing campaigns that appeal to a certain group of consumers. It can also help businesses identify the best ways to optimize their product offerings or services based on customer needs and preferences.

For example, a clothing retailer might target women who are in the baby boomer or generation X groups, as they may have different tastes and shopping patterns than other shoppers. Similarly, phone service providers often offer family plans to attract families with multiple members.

Other forms of market segmentation include geographic, psychographic, and behavioral. While these methods aren’t as widely used as demographic segmentation, they can be useful when paired with demographics to create more effective marketing strategies. For instance, psychographic segmentation categorizes customers based on their mental similarities such as values and beliefs. Geographic and behavioral segmentation are commonly used to collect market research data.


Rather than spending time and money on marketing to an entire group of customers, marketers can focus their efforts on the smaller groups that will most benefit from their products or services. This allows a business to create stronger connections with customers and develop brand loyalty.

A customer’s attitude toward a product, company or brand is one of the most important factors in market segmentation. This includes attitudes toward lifestyles, religious influence and cultural backgrounds as well as attitudes towards particular industries or occupations.

Marketers can collect attitude information through written surveys or personal interviews and use statistical analysis to create attitude profiles. Often, these profile data help marketers to determine how likely consumers are to buy products and how they may change their purchasing behavior in the future. Knowing which consumer groups have unfavorable attitudes toward a new type of technology, for example, can lead to effective marketing strategies to counter these negative perceptions.


Market segmentation based on behavior involves analyzing customer buying habits and decisions. This is a powerful method because it allows marketers to create targeted marketing campaigns and increase brand loyalty.

For example, a brewery might use behavioral segmentation to categorize consumers into groups like heavy users, medium users and infrequent users. Using this information, the brewery can target its marketing to these groups and create products that meet their needs.

Another type of behavioral segmentation is occasion-based segmentation, which groups customers by the occasions they buy for. This approach lets businesses tailor their products and marketing to specific events, resulting in higher sales and greater brand awareness.

Choosing the right market segmentation strategy is vital to your business success. Keep in mind that external factors can affect customer behavior, such as geopolitical turmoil or new technologies, so you need to evaluate your marketing strategies on a regular basis. Also, remember that you can combine multiple methods to achieve the best results. For example, demographic and behavioral segmentation can work together to create a highly targeted campaign.


Market segmentation allows marketers to create more targeted campaigns that are better suited to customers’ needs and preferences. It also helps reduce marketing costs by targeting only those who are most likely to buy a product or service. Businesses that implement a market segmentation strategy should monitor the results and make adjustments as needed.

In addition, the findings of a market segmentation study can help companies expand their business into new markets or improve existing products by identifying potential problems or needs that could be addressed. Using this information, companies can develop and launch successful products that will be appreciated by their target audience.

The main types of market segmentation are geographic, demographic, psychographic, and behavioral. Each has its own benefits, and businesses can use a combination of these strategies to get the most out of their marketing campaigns. The most important factor is that the criteria used for market segmentation should be clear, measurable, and useful to marketers. For example, dress size is not an usual basis for market segmentation, but some fashion brands have successfully used it to target a particular group of women.


In the era of big data, it has become easier to access more information about customers and their behaviors. As a result, market segmentation has become a vital part of business marketing and planning. This type of strategy involves dividing a large audience into smaller groups to target specific content and products. Using this technique increases the likelihood of your audience engaging with your content, and thus, improving your ROI.

Businesses can also use market segmentation to plan for long-term trends. For example, if there are seasonal shifts in customer demand, market research can inform your purchasing and distribution decisions. Likewise, knowing your buyers’ price sensitivity can help you create sales strategies that maximize revenue.

Lastly, market segmentation can be used to identify potential niche markets for your product or service. For example, if you sell organic foods, a Pinterest campaign that promotes your products to a market segment interested in healthy eating could drive conversions. Similarly, you can segment your market based on key life events. For example, soon-to-be college students will need apartment furniture, while new parents may want baby food.