Article published by : Mathew Madison on Sunday, January 29, 2017 - Viewed 378 times

Category : Marketing

What is Market Segmentation?

What is Market Segmentation?

The term market segmentation refers to the process of defining and dividing a large, homogenous market into clearly identifiable segments for the purposes of marketing according to a target audience’s wants and needs. In other words, market segmentation allows businesses to design marketing campaigns that will specifically address the expectations of a certain audience. Because no company can address all the needs of an entire market – it’s simply too large and too diverse – market segmentation allows companies to focus their efforts to provide specific audiences with the types of products or services they want and require.

Market segmentation typically divides markets into categories based on their behavioral, demographic, psychographic, or geographic traits. The needs of one sub-market vs. another can range rather dramatically, so segregating markets according to these traits is a valuable tool for companies to use when designing their advertising campaigns. Companies can also adjust their current marketing strategies to suit the supply needs of a particular audience.

How Does Market Segmentation Work?

In order for market segmentation to be effective, companies must be able to clearly identify a marketing/audience segment, as well as its size and accessibility. Companies must also be able to determine a segment market’s appropriateness to the policies, services, and products that a company provides. Marketing scuba gear to an inland-dwelling audience may not, for example, prove effective given the audience’s limited access to water. That being said, however, if statistics show that that same market segment frequently travels to coastal areas during certain times of the year, marketing scuba gear to that audience could be a very fruitful endeavor (though only during certain seasons).

Companies must carefully analyze all of the factors concerning market segmentation in order to strategize effective and successful marketing campaigns. As such, many companies hire consulting firms or market analysts to help them strategize the best ways of reaching a target audience. Because advertising campaigns typically involve high production and labor costs, it’s important for companies to weigh all of the factors when deciding on the right advertising strategies for a specific audience.

Staying Ahead of the Competition

In today’s fast-paced and increasingly globalized marketplace, it’s important for companies to stay ahead of the competition. Advertising can be a very effective tool for attracting new audiences and developing a broad and loyal customer base. The trick to effective advertising is to carefully strategize marketing approaches that will maximize long-term profits and minimize marketing costs. To this end, market segmentation is an essential tool.

Market segmentation allows companies and marketers to break-down audiences into definable segments based on behavioral, demographic, and accessibility traits. It also allows companies to assess (or at least hypothesize) whether a market segment will be receptive to the products or services it supplies. Market segmentation also allows companies to decide not only where they will market their services, but also how they will do so. Market segments with a primarily aging or elderly population, for example, may not be receptive to online advertising campaigns, whereas market segments with a high proportion of millennials or young professionals will most likely be far more receptive to online and social media forms of advertising than print sources.

Kelton, a market research firm in Los Angeles, New York, Chicago, and London provides actionable strategic plans with a range of qualitative and quantitative research methodologies like brand tracking, customer journey mapping, market segmentation, copy testing, omnibus surveys and many more. Visit for more info.

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By: Mathew Madison

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