Why Market Segmentation is Crucial for your Business?

Market Segmentation

If you want to improve the effectiveness of the marketing strategy of your business, you can’t overlook the importance of market segmentation. Many of the businesses fail as they produce the product or deliver a service, then they look for the customers to sell it. This approach is not right.

You need to understand your customers and your market first to know what your customers attract the most. Without knowing the nitty-gritty details of your customers, your marketing efforts might go in vain. Therefore, you first need to know:

  • Who is likely to be benefited from your product or service?
  • Where your product or service is sold?
  • Whom you can really help?
  • Who loves your product or service the most?

To get all the answers, you need to know and divide your customer base into segments. So let’s find out what it is, its types, and its benefits. Let’s delve into it!


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What is Market Segmentation?

As evident by the name, it is the process of dividing a large customer base of a homogeneous market into segments who have similar behaviour, interest and purchasing needs. So they share the same characteristics. It would better help you to focus on the marketing strategy to target a particular segment of the customers.

As many businesses can’t target a mass market and if they do so, they are most likely to fail. That’s why they are required to target a specific segment of the customers that are looking for their services or goods. With the help of this segmentation, they can better identify the pain points of their customers and can yield more leads and sales.



Typically, there are four major types:

Types of Market Segmentation

  • Geographic Segmentation: Here customers are divided based on their geographic location and can be segmented based on the city, country, state, region, areas, college, etc.
  • Demographic Segmentation: It involves segmenting customers based on demographical data like gender, age, income, education, religion, etc.
  • Behavioral Segmentation: In this type, customers are segmented as per their traits and habits. Division can be done here based on whether the customers are benefit-oriented, usage, oriented, loyalty-oriented or occasion-oriented.
  • Psychographic Segmentation: It is the segmentation based on the psychological traits of the customers like their values, hobbies, social status, lifestyle, etc.


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Segmenting the market helps you and your marketing team to form a targeted and effective marketing plan to target specific customers to get more sales. Here are the common benefits of it:

  • Provides the Right Direction: The segmentation better identifies your target customers. It provides the right direction for your business to adopt a marketing strategy that works.
  • Provides Value to the Customers: With a defined and targeted customer base, a company can better satisfy the needs of customers by offering incentives, benefits and packages that suit the relevant segment.
  • Less Competition: If a business focuses on a target market, its competition decrease and there is a potential to reach a large customer base by segmentation.
  • Market Expansion: After getting knowledge of different segments, a business can expand its market spectrum.
  • Improved Customer Retention: This approach attracts more customers to your business by getting value through your product or service.
  • Efficient Marketing: Here you can implement a better marketing plan and strategy as per the needs of the customers and can find effective ways to serve their needs.


Quick Sum Up

To sum up the discussion of market segmentation, now you have understood that by segmenting your market and customer base, you can improve your marketing strategy and plan it accordingly. With this segmentation, you can provide an unparallel level of experience to your customers by targeting their unique needs.

In addition, you can be more efficient in terms of money, time and resources. By getting an in-depth understanding of your customers, you can devise effective and tailored campaigns to customers’ segments to get quality leads and sales.


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Disclaimer: This is just a basic guide for your general understanding of market segmentation.

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