What is Market segmentation?
- Content Type:
- Glossary
Market segmentation Definition
The process of dividing a total market into sub-groups of consumers who exhibit differing sensitivities to one or more marketing mix variables. See also segmentation studies.
Market segmentation is the process of dividing a broad market into smaller, more defined subgroups (segments) based on shared characteristics such as demographics, behavior, needs or preferences. This enables companies to target each segment more effectively with tailored marketing strategies.
Who relies on market segmentation in market research?
Businesses, marketers, product managers and advertising agencies rely on market segmentation to better understand and target specific consumer groups. It’s essential for companies aiming to maximize the relevance and impact of their marketing and product offerings within various market segments.
What are key aspects of market segmentation in market research?
Key aspects of market segmentation include:
- Demographic segmentation: Divides consumers based on age, gender, income, etc.
- Geographic segmentation: Considers location-based differences in preferences.
- Behavioral segmentation: Focuses on buying behavior, brand loyalty and usage patterns.
- Psychographic segmentation: Examines lifestyle, values and personality traits.
- Targeted strategy development: Enables the creation of specific marketing approaches for each segment.
Why is market segmentation important in market research?
Market segmentation is important because it allows businesses to focus on the needs and preferences of different consumer groups, increasing the effectiveness of their marketing strategies. By understanding and catering to these segments, companies can improve customer satisfaction, foster loyalty and achieve higher conversion rates.
How do market researchers use market segmentation?
Market researchers use segmentation to analyze and categorize the market into specific consumer groups, identify unique needs and recommend targeted strategies. Segmentation insights guide personalized marketing, product development and advertising efforts, ensuring each segment receives relevant messages and solutions, thus optimizing business outcomes.