What is meant by 'market segmentation'?

Market segmentation refers to the process of dividing a broader market into distinct subsets of consumers who share similar needs, characteristics, or behaviors. This approach allows marketers to tailor their strategies and messages to specific groups, enhancing the relevance of their offerings and improving customer satisfaction. By segmenting the market, companies can identify target audiences more effectively and allocate resources efficiently, ultimately leading to more successful marketing campaigns.

For instance, a company might segment its audience based on factors such as demographics, geographic location, psychographics, or buying behavior. This targeted approach enables businesses to create personalized marketing strategies that resonate with each segment, resulting in higher engagement and conversion rates.

Understanding market segmentation is crucial for effective marketing and advertising, as it lays the groundwork for developing targeted messages and products that better meet the needs of specific consumer groups.