Market Segmentation

Market segmentation is the process of dividing a broad target market into smaller groups of consumers with similar needs or characteristics. This technique enables businesses to tailor their marketing efforts and better understand their customers. There are various ways to segment a market, including demographic, geographic, psychographic, and behavioral segmentation. For example, a company selling luxury watches might segment its market based on income level or age group. It would then create targeted marketing campaigns that appeal specifically to each segment. Similarly, a restaurant might use geographic segmentation to target customers who live or work within a certain radius of their location. Market segmentation allows businesses to focus their efforts on the most promising customer groups and allocate their resources more effectively. By personalizing their marketing messages and offerings, they can build stronger relationships with their customers and increase their chances of success.