Market Segmentation

Market segmentation is the process of dividing a broad market into smaller, more defined groups of consumers who have similar needs, characteristics, or behaviours. Common types include demographic (age, gender), geographic (region, city size), psychographic (lifestyle, personality), and behavioural (usage, loyalty). This approach lets you personalize your marketing, making it more effective and efficient.

Segmenting your market allows for better resource allocation. For instance, if your primary audience is urban professionals aged 25–35, you can focus your digital ad budget on platforms and messages that speak directly to them. It also helps you develop more relevant product features, prices, and promotions.

One real-world example is how Netflix personalizes content recommendations based on viewer behaviour essentially a dynamic form of behavioural segmentation. For smaller businesses, email marketing platforms like Mailchimp offer built-in segmentation tools for personalized campaigns.

Ultimately, segmentation leads to increased customer satisfaction and improved return on marketing investment.