4 Types of Market Segmentation

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Using different types of market segmentation allows you to target customers based on unique characteristics, create more effective marketing campaigns, and find opportunities in your market.
See how you can leverage market segmentation by learning:

Eight Benefits of Market Segmentation

The importance of market segmentation is that it makes it easier to focus marketing efforts and resources on reaching the most valuable audiences and achieving business goals.
Market segmentation allows you to get to know your customers, identify what is needed in your market segment, and determine how you can best meet those needs with your product or service. This helps you design and execute better marketing strategies from top to bottom.

his may have happened to you.

You see a promotion or an advertisement that seems to “read your mind”. You instantly resonate with the message. But you might completely skip the content of a rival brand that serves similar pain points.

Why do some products instantly appeal to us? While other offerings never register on our radars?

The reason behind this is the effective execution of a strategy called market segmentation.

Developed back in the 1950s, market segmentation is based on the understanding that a solution can’t be everything to everyone.

A product is bound to have features that solve certain pain points better than others. This ability makes the offering attractive to groups of prospective buyers who are grappling with the problems it eliminates. These people have similar motivations and desires and are easy to cluster together.

It is in the best interest of companies to identify such segments that are favorably disposed towards their products and spend their advertising budget reaching out to them.

Through this article, I will explore the importance of market segmentation, the different types of segmentation strategies, the process of coming up with a segment and some challenges involved.

What is Market Segmentation or Customer Segmentation?

The classic definition of market or customer segmentation is “dividing a broad and heterogeneous market comprising of prospective customers with several different types of preferences, pain points and varied buying capacities into smaller homogenous sub-groups on the basis of perceived commonalities of age, gender, location, income, interests, problems and cultural backgrounds so that grabbing their attention with one marketing message is easier”

A great example of market segmentation in action is the automobile industry. Everyone needs a car to travel back and forth. But if getting from one place to another is the only “requirement” on the basis of which companies promote their products, then why are there so many different makes, models and versions – often from one single brand?