Market Segmentation

Market Segmentation is the practice of dividing a large group of consumers into distinct subsections based on shared characteristics or interests. This strategy helps businesses to identify the right target customers and define a clear marketing strategy and create a product or service that will meet the needs and wants of both the business and the consumers.

Product and services often attract a wide range of consumers from all demographics. In order to identify and satisfy those target customers, businesses need to use market segmentation. Through this strategy, marketers identify key areas of their product or service that have the potential to reach high-value consumers. Market segmentation focuses on a few key characteristics in order to identify target consumers. These include: demographics, interests, consumer needs and behaviours, location, and many others. By segmenting the market, businesses can identify the key audiences who are most likely to buy their product or service and create a marketing strategy tailored to that group of people.

For example, a graphics design company may be looking to target users within a certain age group and those with an interest in graphic design. In order to identify this target segment, the company would need to find out more about their potential customers; who they are, where they shop and live, what their needs and wants are. By understanding this segment, the company can create a tailored website, build content and design products that speak directly to this target segment.

A clothing company has segmented its market into 4 distinct segments: young adults, young parents, older adults, and retirees. The company realised that its key target segments were young adults and young parents. To reach this target segment, the company created a tailored website with content and products that appeal to these individuals. They also launched an advertising campaign targeting this segment by offering discounts and promotional offers. The company also identified young parents as a key target segment and was able to create a website and content that appealed to them as well. As a result, the company was able to increase profits and gain loyal customers within this target segment.