Updated on March 10, 2023
Market segmentation is a marketing tool used for dividing the market into smaller and prominent segments on the basis of certain distinct characteristics like gender, interests, income, age, location, occupation etc. These groups generally share similar characteristics and have one or more common traits making it easier to create marketing campaigns. It is considered to be an efficient marketing tool for targeting consumer groups. Market segmentation makes it easier for personalising campaigns, focusing on critical items and combining specific consumers. Market segmentation can be geographic, demographic or even behavioural.
Why is Market segmentation important?
Market segmentation helps companies is certain ways, some of which are:
1. Market segmentation gives companies a better perspective of their target market, helping them to develop effective marketing strategies
2. Market segmentation helps in the growth of a company’s customer base and ensures their loyalty to a large extent
3. It assists companies to identify the needs of specific groups and strategize & plan their products and services accordingly
4. Market segmentation reduces wastage and promotes effective and efficient use of company resources