Understanding your company’s audience, reaching them, and satisfying their needs is fundamental to marketing. Since each customer has a specific set of characteristics, there are many different customers that businesses need to reach. To achieve this, it is necessary to develop effective marketing campaigns that resonate with all customers. This can be achieved by categorizing potential customers into groups according to their needs and preferences. These groups are called segments and the process is called market segmentation.
What is market segmentation?
Overall, segmentation is a process of dividing larger groups into separate smaller parts or sections also known as segments. Market segmentation is a process focused on marketing.
Market segmentation refers to separating a larger group of potential customers that share similar characteristics into separate smaller groups (market segments). This entire group of potential customers is also known as a target market. And every market segment in the target market shares specific characteristics, desires, or needs.
Why market segmentation is important?
Breaking the target market into smaller groups helps the brand to create specifically customized marketing campaigns that are relevant to its target audience. The purpose of market segmentation is to help businesses deliver their products specifically customized to the needs of their smaller markets. With this knowledge, brands will encourage their audience to choose their products over their competitors, building brand loyalty.
Market segmentation also improves the return on investment (ROI) for your business. Delivering specifically customized marketing campaigns to your target audience increases the chance that they will click through and purchase your goods or services. In this way, you save capital from offering your products to customers who have no interest in them.
There are plenty of ways to segment your potential customers. However, there are some basic criteria that market segmentation is divided into.
What are the types of market segmentation?
Even if there are plenty of ways to segment your target audience there are four most common ones also known as types of market segmentation. Such types are: demographic, geographic, psychographic, and behavioral.
- Demographic segmentation – This includes the age, gender, religion, income, family size, etc. of your audience and it’s the most common type of segmentation.
- Geographic segmentation – This type represents the geographical location of your target audience.
- Psychographic segmentation – This type of segmentation includes the lifestyle, hobbies, and interests of your target market.
- Behavioral segmentation – As the name suggests, this type of segmentation refers to the behavior of your consumers. This includes their interests, shopping habits, and interactions with your brand.
Conclusion
Market segmentation is the process of separating a larger group of potential customers into different smaller sections based on their characteristics. While there are many ways to segment your target market, the most common characteristics include demographic, geographic, psychographic, and behavioral. Through this, you can provide more precisely personalized marketing campaigns aimed at your target audience.
