What does market segmentation involve?

Market segmentation involves dividing a market into different consumer groups based on various characteristics such as demographics, psychographics, geography, or behavior. This process allows businesses to tailor their marketing strategies to meet the specific needs and preferences of each segment, leading to more effective communication and engagement with potential customers. By recognizing that not all consumers are the same, companies can create targeted marketing campaigns that resonate more strongly with specific groups, ultimately enhancing customer satisfaction and increasing sales.

For instance, a skincare company might segment its market based on age and skin type, allowing it to develop customized products and marketing messages that appeal to teenagers with acne, adults seeking anti-aging solutions, or seniors desiring moisturizing products. This targeted approach can lead to a more efficient allocation of marketing resources and better overall performance in the marketplace.