Market Segmentation - Explained
What is Market Segmentation?
Written by J. Mance Gordon
Updated at April 17th, 2024
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What is Market Segmentation?
Market segmentation is a marketing practice. It involves separating potential customers or clients into a group or segment based upon identified characteristics. The objective is to be able to develop marketing and sales plans that will address the needs or wants of the customer. If done correctly, the group will have common needs or wants that relate common demographic characteristics.
What is a Good Market Segment?
A good market segment is one in which the members in that segment or the consumers in that segment are similar to each other. That is, they have something in common.
At the same time, those members or those consumers are going to be somehow different from people that are not in that market segment
The segment must be large enough to be profitable. Of course, this depends greatly upon what the product is or what the services that we provide, the price, and how many consumers we need in order to be profitable.
Finally, the business (or marketers) must be able to identify those in the market segment and have an ability to reach them by communication and promotion efforts.
Related Topics
- What is a Market?
- What is Target Marketing?
- What is Market Segmentation?
- How Many Segments to Target?
- How Do We Segment Consumer Markets?
- Benefit Segmentation
- How Do We Segment Business Markets?
- Using Data for Market Segmentation
- Buying Power Index
- What is Customer Relationship Management?
- What is Behavioral Targeting?
- What is Positioning?
- What is a Positioning Statement?
- What is a Perceptual Map?
- Cultural Factors Affecting Marketing
- International Marketing is Challenging