What is market segmentation?

Market segmentation is the process of dividing a target market into distinct groups based on shared characteristics, such as demographics, geographic locations, psychographics, or behavior. This strategy allows businesses to tailor their marketing efforts to meet the specific needs and preferences of different segments, leading to more effective communication and engagement. By understanding the unique attributes of each segment, companies can develop targeted products, services, and marketing campaigns that resonate better with each group.

This approach is crucial because it acknowledges that not all customers are alike and that different segments may respond differently to marketing strategies. For instance, a product may be appealing to younger consumers but not to older ones. Segmentation helps identify these varying needs, allowing businesses to allocate resources more efficiently and create more meaningful connections with their audience.